Canada Pushes Embedded Contingent Capital

Canadian officials have been promoting embedded contingent capital as the best alternative for dealing with systemically important financial institutions (SIFIs), or banks that are "Too Big to Fail," as they have historically been referred to. On April 9, the Office of the Superintendent of Financial Institutions (OSFI) had its article advocating the concept published in London's Financial Times. On April 13, Canada's Minister of Finance wrote a letter to his G-20 colleagues with the same message. Earlier this month several federal ministers spoke out against the concept of a bank tax as the appropriate response for dealing with SIFIs. It is expected that Canada will push the concept of embedded contingent capital when it hosts the G-20 meeting in June.