Canada: Financial Sector Assessment Program-Technical Note-Deposit-taking Sector: Regulation and Supervision

International Monetary Fund

No 2020/020, IMF Staff Country Reports from International Monetary Fund

Abstract: The Technical Note focuses on sizeable mortgage exposures and persistent housing market imbalances. The review evaluated oversight of deposit-taking institutions (DTIs) in federal jurisdiction, as well as in British Columbia and Québec. There are many good, well-functioning mechanisms in place for cooperation. Areas that warrant improvement about DTI regulation and supervision include policy development, especially between Office of the Superintendent of Financial Institutions (OSFI) and Autorité des marchés financiers, coordination of data collection, and exchange of useful prudential information between different agencies. The authorities should explore how to remove barriers that prevent close and meaningful cooperation. Risk weights on mortgage lending appear too low for insured mortgages and may not be sufficiently through-the-cycle for banks using the Internal Ratings Based approach. A common forbearance definition and monitoring framework for credit risk (in the context of loan restructuring by DTIs should be adopted across all jurisdictions in Canada. A similar definition, in line with the guidance of the Basel Committee for Banking Supervision, and consistent data will help improve risk monitoring especially given the importance of debt restructuring for managing problem real estate exposures. Finally, OSFI’s guideline on asset pledging should ensure enough unencumbered assets to support the claim of depositors.

Pages: 58
Date: 2020-01-24
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=48974 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfscr:2020/020

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Staff Country Reports from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().