Superintendent Routledge participates in a fireplace chat on the Global Risk Institute Summit 2025

Check in opposition to supply

Moderator:

You’ve stated OSFI is trying to cut back regulatory burden the place potential. Can you give us some concrete examples of the place you see alternatives to try this, whereas nonetheless sustaining resilience?

Superintendent Peter Routledge:

• On August 18, I laid out how we’re persevering with to make regulatory effectivity a self-discipline in OSFI. We’re decreasing the scope and timing of sure integrity and safety information requests, shifting the company governance session to concentrate on essentially the most materials points, and eliminating redundant information collections. Those modifications unlock capability with out compromising resilience.
• On supervision, we’re being extra measured in how we apply depth. Operational danger supervision is hard — and rightly so — however we’re recalibrating how we stage and intervene, so the oversight matches the chance profile, not a one-size-fits-all strategy.
• In capital, we’re making focused changes. We paused Basel III implementation of the “output floor” to make sure that aggressive steadiness prevails for Canadian banks that compete within the worldwide banking system and to offer Canadian banks with transparency and predictability in OSFI’s capital expectations.
• At the identical time, we’re not loosening all over the place. On anti-money laundering, as an example, the trajectory continues to be tighter — as a result of the chance atmosphere calls for it.

Moderator:

You’ve stated AML is a prudential subject. With the federal Strong Borders Act (Bill C-2) on the desk and the Financial Action Task Force (FATF) evaluate developing later this 12 months, how involved are you about AML proper now — and what’s altering in how OSFI will supervise it?

Superintendent Peter Routledge:

• AML is a prudential danger. Weak AML controls can erode integrity and confidence, which in flip threaten security and soundness. That’s why we deal with AML as a part of our integrity and safety danger lens and a precedence in our danger outlook.
• No different regulator has a mandate to make sure federally regulated monetary establishments (FRFIs) have insurance policies and procedures in place to guard themselves from threats to their integrity and safety and from overseas interference.
• Our Integrity and National Security group engages carefully with home safety and intelligence companions in addition to our worldwide counterparts to establish threats to FRFIs. By bringing collectively categorised and unclassified data, our group can take a look at a holistic image of the integrity and safety dangers establishments face. That consists of affect from overseas jurisdictions.
• Bill C-2 strengthens coordination. If Parliament passes Bill C-2, FINTRAC will be part of the Financial Institutions Supervisory Committee (FISC). I’d be very happy to welcome FINTRAC at that desk. It will facilitate data alternate and permit us to reply extra rapidly by means of supervision.

Moderator:

To what extent are OSFI’s actions pushed by what occurs south of the border, particularly once we see deregulatory tendencies within the United States?

Superintendent Peter Routledge:

• Canada’s monetary system is navigating a interval of profound uncertainty. From escalating geopolitical instability and cyber threats to local weather change and home financial shifts, the dangers dealing with monetary establishments are advanced and consequential. Canada is a North American financial system, and our banks and insurers compete within the U.S. market, so we can’t ignore modifications of their regulatory atmosphere.
• Over the final 15 years, OSFI has constructed enduring resilience into Canada’s monetary system. These efforts have confirmed to be each mandatory and efficient. That resilience is a strategic benefit that may be leveraged to help development within the Canadian financial system. This just isn’t a departure from our core mandate: it’s a daring extension of it. A robust, steady monetary system isn’t only a safeguard—it’s a catalyst for nationwide prosperity.
• OSFI has proactively established an annual self-discipline of refining our regulatory pointers and advisories to seek out alternatives to take away pointless burden. Our focus has been clear: cut back regulatory burden the place potential, sharpen our concentrate on an important dangers, and guarantee establishments stay resilient in an unsure danger atmosphere.
• We alter when mandatory. For instance, final 12 months we paused the Basel III output ground as a result of the hole with worldwide friends, together with the U.S., had widened past what we had been comfy with. That was about preserving a good enjoying discipline whereas maintaining resilience intact.
• With an unwavering concentrate on a sound monetary system, innovation, and public confidence, we’ll proceed to allow Canadian monetary establishments to play a central function in constructing Canada’s financial energy.

Moderator:

If we see extra deregulation within the U.S. and tariffs begin to have extra affect, how will OSFI make certain Canada stays aggressive whereas nonetheless sustaining its danger posture?

Superintendent Peter Routledge:

• We can be proactive. You can count on us to behave early, not wait. When dangers shift, we glance forward, anticipate, and alter our strategy earlier than Canadian establishments are at an obstacle.
• Our strategy is incremental. We make modifications in measured steps, not sudden swings. That offers boards and executives readability and time to regulate, whereas guaranteeing the system stays protected.
• A robust, steady monetary system isn’t only a safeguard — it’s a catalyst for nationwide prosperity. Canada’s monetary system is constructed on resilience, and that resilience is a strategic asset.
• We reply with prudence. Whether it’s tariffs or U.S. deregulatory strikes, it’s best to count on a prudent response: one which protects depositors and policyholders whereas enabling establishments to help Canada’s financial system by means of unsure instances.

Moderator:

What is OSFI doing that may assist small and medium-sized companies entry the capital they should develop?

Superintendent Peter Routledge:

• We proceed to work to establish the place and the way we will greatest align capital necessities with precise danger. Regulatory effectivity reduces pointless capital pressure with out compromising security and soundness and supporting the competitiveness of our monetary establishments the place warranted. This frees up capability that banks can use to increase extra credit score.
• More broadly, OSFI has been targeted on regulatory effectivity the place potential, by honing on an important dangers, and guaranteeing establishments stay resilient in an unsure world. We have proactively established an annual self-discipline of refining our regulatory pointers and advisories to seek out alternatives for regulatory effectivity.