In an interview, Superintendent Peter Routledge outlined the Office of the Superintendent of Financial Institutions’ (OSFI) current direction on capital standards, supervision, and regulatory processes. He argued that Canada’s post-Global Financial Crisis build-up of capital and liquidity buffers has largely met its objective and that OSFI’s focus can now shift to disciplined, evidence-based fine-tuning without weakening prudential soundness. OSFI pointed to targeted capital recalibration work where evidence supports change, including consultations on lower risk weights for certain small and medium-sized enterprise (SME) exposures and adjustments related to infrastructure investment by life insurers that have now been extended to the property and casualty (P&C) sector. It also highlighted regulatory modernization actions over the last couple of years, including removing over 600 pages of redundant, outdated, or trivial material from its guidance library and consolidating requirements. On market entry, OSFI is developing a fast-track approvals framework for eligible new entrants, initially focused on credit unions and entities with innovative or emerging banking models, aiming to move from a complete application to a recommendation to the Minister within a 12-month cycle, supported by clearer service standards and earlier identification of supervisory issues. The Superintendent also described supervisory priorities including monitoring governance and integrity risks from rapid adoption of artificial intelligence, close attention to housing-related credit risk among borrowers facing mortgage renewal payment resets, and scrutiny of banks’ contingent exposures to private credit funds through liquidity facilities and other commitments. For insurers, OSFI is engaging firms on private market exposures and plans to prioritize supervisory reviews in this area over the coming year, alongside updates to regulatory returns to align with IFRS 18 Presentation and Disclosure in Financial Statements and a one-year deferral of the annual Life Insurance Capital Adequacy Test (LICAT) update.
Office of the Superintendent of Financial Institutions 2026-03-24
Office of the Superintendent of Financial Institutions signals targeted capital recalibration and a 12-month fast-track approvals process for eligible new entrants
Superintendent Peter Routledge of the Office of the Superintendent of Financial Institutions (OSFI) outlined a strategic shift towards fine-tuning capital standards and regulatory processes, emphasizing evidence-based adjustments. OSFI is recalibrating capital requirements for SMEs and infrastructure investments, modernizing regulatory guidance, and developing a fast-track approvals framework for new market entrants. Supervisory priorities include monitoring AI-related governance risks, housing credit risks, and banks' exposures to private credit funds, focusing on insurers' private market exposures and alignment with IFRS 18.