Global Wealth Management and Banking Overview
Overview of Canadian Bail-in Regulations
Introduction
• In effect since September 23, 2018
• Canada's resolution authority is Canada
Deposit Insurance Corp (CDIC)
• Bail-in framework provides CDIC the
statutory power to convert certain
eligible debt into common equity to
recapitalize a non-viable DSIB
Supplements existing NVCC framework
and other resolution tools
。 Several tools available including bail-in and
restructuring the bank
。 Goal to return the bank to viability
Applies to six Canadian DSIBs, including
Scotiabank
Bail-In Basics
A statutory conversion power that allows for the
permanent conversion of eligible shares and
liabilities of a non-viable bank into common shares,
incremental to OSFI's conversion of NVCC
Bail-in conversion would occur in the context of an
open bank; the bank remains open and operating
and continuing to provide critical services to its
customers
CDIC has flexibility to determine:
Quantum of conversion - portion of bail-in debt to be converted
into common shares
Timing of conversion - if it will take place immediately or over a
period of time
Process for converting - if conversion will take place in one or
more steps
CDIC must adhere to certain parameters
Adequate recapitalization
Order of conversion
Equally ranking instruments
Relative creditor hierarchy
Scotiabank®
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