Canadian Bail-in Regime Update

Domestic Stability Buffer Background Canadian Domestic Systemically Important Banks (D-SIBs) are required to hold Pillar 2 capital buffer that is privately communicated to each bank, to address risks that are inadequately captured by the Pillar 1 minimum capital requirements D-SIBS are subject to publicly-disclosed Pillar 1 minimum of 8.0% and undisclosed non-public Pillar 2 buffer What Has Changed The Domestic Stability Buffer increased to 3.50% of RWA effective November 1, 2023 from 3.00%; it can range between 0% to 4% depending on OSFI's assessment of systemic vulnerabilities D-SIBs face including Canadian consumer and institutional indebtedness, as well as asset imbalances in the Canadian market OSFI announced on June 20, 2018 a revised framework where a component of the Pillar 2 buffer for D-SIBS will be publicly disclosed 1 The purpose of public disclosure is to provide greater transparency to the market and other stakeholders, and to enhance the usability of the buffer by the banks in times of stress A breach would require a remediation plan from the bank OSFI will undertake a review of the buffer on a semi-annual basis, in June and December any changes being made public Current 3.50% Implications for Banks There is no incremental capital requirement for banks. This is a transition of the Pillar 2 capital buffer requirement from private to public domain. Given CIBC (and other Canadian D-SIBS) are well above the minimum requirement, do not believe this will impact banks' capital planning in a material way Domestic Stability Buffer² 12.4% Pillar 1 Minimum 8.00 for D-SIBS* CIBC 1. There may be an additional private component to Pillar 2 buffer specific to individual banks 2. The Domestic Stability Buffer was originally set at 1.5% when introduced OSFI Target CIBC (Q1/24) Consists of 4.5% minimum plus 2.5% of capital conservation buffer plus 1.0% current D-SIB surcharge 59 52

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