OSFI superintendent sets out three priorities for regulator for year ahead
Canada’s superintendent of financial institutions has spoken of a financial world that feels as uncertain as the late 1980s and early 1990s, when “every morning brought a new, amazing headline.”
Speaking at the Global Risk Institute Summit 2025 last week, OSFI’s Peter Routledge pointed to risks ranging from geopolitics and cyber threats to climate change and economic stress but stressed that Canadian institutions remain in a strong position.
“There is an old saying that there are decades when nothing happens and weeks where decades happen. The present day seems closer to the latter part of that framework,” he told Sonia Baxendale, president and CEO of the Global Risk Institute.
Routledge noted that banks are carrying Common Equity Tier 1 (CET1) ratios of 13.7% which is well above the 11.5% minimum for systemically important banks. He said this gives lenders capacity to absorb risk-weighted asset growth of nearly $500 billion in a $3 trillion economy. Life insurers have also expanded their core capital by about 13% since 2019, strengthening their ability to capture growth.
“Over the last 15 years, the boards of OSFI's regulated constituents have built enduring resilience into Canada's financial system; with encouraging support from their friendly financial institution supervisor. Their efforts have proven to be both necessary and effective,” Routledge said.
Since the global financial crisis, OSFI has introduced tougher standards for capital, liquidity, and non-financial risks. But Routledge emphasized that the regulator is also becoming more agile and willing to adjust its approach including revamping its approvals process “to ease entry and, with that, mature our tolerance for risk. We aim to find opportunities for more timely approval of new entrants to the banking sector.”
Three Priorities for OSFI
- Proactive, evolving oversight
OSFI is moving earlier on emerging issues, cutting outdated guidelines, and scaling oversight to risk. In 2024 it withdrew 20 advisories, postponed some Basel III measures, and in 2025 reduced capital requirements for insurer investments in infrastructure.
- Balancing competition
The regulator has paused implementation of the Basel III output floor to prevent Canadian banks from being put at a disadvantage globally. It is also working with smaller lenders to refine capital requirements and lighten compliance where appropriate, with further steps expected later this year.
- Encouraging innovation
With technologies like stablecoins and tokenization advancing, OSFI aims to streamline approvals for new entrants and embrace measured risk-taking. Its guiding principle remains: “same activity, same risk, same regulatory principles.”
While integrity and security requirements will remain strict, Routledge signaled a shift toward a more flexible, responsive regulator. Canada’s financial institutions, he argued, are well-positioned to withstand shocks while adapting to new opportunities.
“I am confident in stating that the Canadian financial system is as resilient as it has ever been. Unusual for a financial institution supervisor to declare, I know, and I refer again to the humility I have about the uncertainty we face. Resilience is not a guarantee, it is an asset and one that is finite at that,” he said.
