OSFI issues final version of the Leverage Requirements Guideline

News Release

For Immediate Release

October 30 2014 ─ Ottawa, Ontario ─ Office of the Superintendent of Financial Institutions

The Office of the Superintendent of Financial Institutions (OSFI) today released the Leverage Requirements Guideline. As announced earlier this year, OSFI is replacing its Asset to Capital Multiple with the Basel Committee on Banking Supervision Leverage Requirements, released in January 2014. The guideline sets out OSFI’s expectations for the implementation of these internationally agreed to rules by Canadian financial institutions. It replaces the Asset-to-Capital Multiple (ACM) measure currently contained in OSFI guidance, notably in the Capital Adequacy Requirements guideline.

Quick Facts

  • Deposit-taking institutions are well positioned to meet the requirements contained in this guideline by the Q1 2015 implementation date.
  • Early adoption of the Basel Leverage Requirements (2015 vs.2018) contributes to reduced burden on institutions by requiring only one set of calculations and public disclosures related to a regulatory leverage test.
  • Although OSFI did not receive any comments during the consultation period on the draft guideline, we have made a number of revisions to facilitate cross-border competition and comparability. These changes from the draft version reflect updates provided in the Basel Committee FAQs (October 2014) related to the leverage ratio as well as other international developments (e.g. the treatment of cash variation margin).
  • Federally regulated deposit-taking institutions will be expected to have Basel III leverage ratios that exceed three per cent. As has been the case with the ACM, OSFI will continue to set authorized leverage ratios on an institution-by-institution basis.

Quote

“The international adoption of a consistent leverage test will help promote financial stability, competition, and comparability across institutions and across jurisdictions,” said Deputy Superintendent Mark Zelmer. “Replacing the Asset Capital Multiple test with the Basel III Leverage requirements will alleviate regulatory burden on institutions by reducing the number of calculations and disclosures, while maintaining robust supervisory oversight of leverage.”

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Media Contact

Brock Kruger
OSFI – Public Affairs
brock.kruger@osfi-bsif.gc.ca
613-949-8941

Created in 1987 by an Act of Parliament, OSFI is the primary regulator and supervisor of federally regulated deposit-taking institutions, insurance companies, and federally regulated private pension plans. OSFI's mandate is to advance and administer a regulatory framework that contributes to public confidence in a strong, stable and competitive financial system.