Q3 2019 Fixed Income Investor Presentation
Canadian Bail-in Regime Update
On April 18, 2018, Department of Finance published the bail-in regulations, and OSFI finalized the
guidelines on Total Loss Absorbing Capacity (TLAC) and TLAC holdings.
1. Department of Finance's bank recapitalization (bail-in) conversion regulations
■ Provide statutory powers to CDIC (through Governor in Council) to enact the bail-in regime including the ability to
convert specified eligible shares and liabilities of D-SIBs into common shares in the event such bank becomes non-viable
Bail-in eligible liabilities include tradable (with CUSIP/ISIN), unsecured debt with original maturity of over 400 days
■ Excluded liabilities are covered bonds, consumer deposits, secured liabilities, derivatives, and structured notes¹
Effective on September 23, 2018
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2. OSFI's TLAC guideline
■ TLAC liabilities must be directly issued by the D-SIB, satisfy all of the requirements set out in the bail-in regulations, and
have residual maturity greater than 365 days
■ Minimum requirements:
■ TLAC ratio = TLAC measure / RWA > 21.5%
■ TLAC leverage ratio = TLAC measure / Leverage exposure > 6.75%
■ TLAC supervisory target ratio set at 23.25% RWA²
▪ Effective Fiscal 2022. Public disclosure began in Q1 2019.
3. OSFI's TLAC holdings
■ Our investment in other G-SIBS and other Canadian D-SIB's TLAC instruments are to be deducted from our own tier 2
capital if our aggregate holding, together with investments in capital instruments of other Fls, exceed 10% of our own
CET1 capital
Implementation started in Q1 2019
1 As referenced in the Bank Recapitalization (Bail-in) Regulations: http://laws-lois.justice.gc.ca/eng/regulations/SOR-2018-57/FullText.html
2 Increases to 23.50% when the Domestic Stability Buffer rises to 2.00% effective October 31, 2019
CIBC Q3 2019 Fixed Income Investor Presentation
CIBC
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