Canada’s six biggest banks have been officially designated as being critical to the well-being of the national economy, which means that, although they aren’t deemed to be among the world’s most systematically important financial institutions, they will be treated as such.
The Office of the Superintendent of Financial Institutions Canada has tagged the banks — the Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank — with the label of being domestic systemically important banks (D-SIB). As such, they will be subject to a 1-per-cent risk-weighted capital surcharge by Jan. 1, 2016.
The surcharge is in addition to the common equity tier-one ratio of 7 per cent those banks must already hold. OSFI also said that D-SIBs will be subject to continued supervisory intensity and enhanced disclosure.