OSFI expects FRFIs’ boards and senior management to act responsibly in making decisions regarding capital distributions following this announcement, including by employing risk management practices and sensitivity analysis that relies on conservative and prudent assumptions, and by continuing to assess vulnerabilities related to any remaining uncertainty due to COVID -19.
The announcement was made by OSFI Superintendent, Peter Routledge, through a live webcast. He noted that the original rationale for implementing the capital distribution restrictions as a counterbalance to regulatory accommodations intended to support FRFIs during the COVID-19 pandemic is no longer valid as most of these regulatory accommodations were removed earlier in 2021. Additionally, the Superintendent reiterated that appropriate responsibility for capital distribution decisions rests with a FRFI’s board of directors and senior management, and OSFI’s role is to determine whether a FRFI remains in sound financial condition.
In his remarks, the Superintendent also described OSFI’s intention to respond to the long-term risks presented by climate risk and the digitalization of financial services.
For further information, please contact:
Paul Belanger 416-863-4284
Ora Morison 416-863-2712
Vladimir Shatiryan 416-863-4154
or any other member of our Financial Services Regulatory group.
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