OSFI sees no room for complacency as it sets out new framework

Strategic Plan focuses on four key goals to ensure the stability of Canada’s financial system

OSFI sees no room for complacency as it sets out new framework
Steve Randall

The resilience and increased strength of the Canadian financial system has been stable since the financial crisis but that doesn’t mean things could change.

It’s important that vigilance remains to avoid the financial system put under risk by complacency, the Office of the Superintendent of Financial Institutions said Thursday as it unveiled its Strategic Plan 2019-2022.

With more than 400 financial institutions and more than 1200 pension plans under its jurisdiction, with combined AUM of over $7 trillion, OSFI’s role in ensuring financial system resilience is clear.

But while much has been done in recent years, the job continues and OSFI is focusing on four key goals:

  • improve regulated entities’ preparedness and resilience to financial risk;
  • improve their preparedness to identify and develop resilience to non-financial risks;
  • improve OSFI’s agility and operational effectiveness through responsible stewardship of our resources;
  • preserve support from Canadians and cooperation from the financial services industry by being transparent and accountable.

The scale of the entities regulated by OSFI has increased significantly in recent years with total assets growing almost 40% and deposits at Canada’s six largest banks up more than 50% in last five years.

Meanwhile, household debt, asset imbalances, extreme weather events and cyber-attacks are all key risks. The BoC warned in March that household debt is a vulnerability for the financial system.

“The Canadian financial sector is constantly undergoing change. Our strategic plan charts a path for the future that builds on past achievements, while focusing us on future challenges so OSFI can continue to provide strong prudential regulation and supervision,” said Superintendent Jeremy Rudin.

Assistant Superintendent appointed

OSFI recently appointed Ben Gully as its Assistant Superintendent, Regulation Sector.

Gully joined OSFI in 2001 but spent 2 years as the first Chief Risk Officer at the Australian Prudential Regulation Authority. He re-joined OSFI in 2017 and is already part of OSFI’s Executive Committee, currently in the role of the Assistant Superintendent, Risk Support Sector.

He takes up his new role in the fall and will become OSFI’s representative on the Basel Committee on Banking Supervision (BCBS) upon Carolyn Rogers’ departure in June.