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ARTICLE · 29 FEBRUARY 2024

Scaling Up Risks: OSFI's New Supervisory Approach To Financial Institutions

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The Office of the Superintendent of Financial Institutions (OSFI) released its new framework for supervising federally regulated financial institutions (FRFIs) on February 8, 2024.

CanadaFinance and Banking
Eli Monas
Eli Monas
Melissa Prado
Melissa Prado
Tim Pavlov
Tim Pavlov
Jaidyn McEwen
Jaidyn McEwen
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The Office of the Superintendent of Financial Institutions (OSFI) released its new framework for supervising federally regulated financial institutions (FRFIs) on February 8, 2024. The new framework, which will come into force in April 2024, is the most significant change to OSFI's supervisory approach in 25 years.

What you need to know

  • Eight-point risk rating. The new framework will expand the previous four-point intervention risk rating scale to an eight-point Overall Risk Rating Scale, which maps to OSFI's existing intervention stage ratings to provide an earlier indication of changes in OSFI's risk assessment of particular FRFIs.
  • Tier risk rating system. OSFI will implement Tier Rating, which will be based on an FRFI's size and complexity, as well as OSFI's view of the impact that the FRFI's failure could have on the financial system.

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