International Banking - Annual Overview
CANADIAN REGULATORY ENVIRONMENT:
BAIL-IN AND TLAC
Banks to begin reporting TLAC measures in Q1/19
⚫ October 2011: Financial Stability Board (FSB) drafted recommendations regarding
resolution regimes for global systemically important banks
• 2014: Canadian consultation process began. In 2016, amendments to CDIC Act, Bank Act
and other statutes were passed to allow for a bank recapitalization (bail-in) regime
o Provided CDIC statutory power to convert specified eligible liabilities of domestic systemically
important banks (DSIBS) into common shares in the event such banks become non-viable
。 Extended existing CDIC powers with respect to managing the unlikely scenario of a bank failure
⚫ 2017-2018: Public consultation on final bail-in regulations and the related Total Loss
Absorbing Capital "TLAC" guideline completed July 2017
。 Expect regulations to be applied in 2018
⚫ 2021: TLAC compliance for DSIBS required by Q1/22
。 Minimum TLAC ratio of 21.5% of RWA and minimum TLAC leverage ratio of 6.75%
。 Banks likely to maintain buffers above the minimum requirements
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