OSFI's Annual Risk Outlook Flags Key Risks For Financial Sector, Regulator's Response
The Office of the Superintendent of Financial Institutions (OSFI) on Tuesday said it will focus on achieving "resilience in stress" for the Canadian banking sector.In its 2026-2027 Annual Risk Outlook, released on Tuesday, the regulator flagged real-estate secured lending risks, non-bank financial institution risks, liquidity and funding as the key issues facing the financial sector.Housing and mortgage pressures have increased in some parts of the country. Risks outside the traditional banking system have also expanded, including in areas where non-bank lenders and investment funds are taking on more borrowing. Global uncertainty may also impact confidence in funding markets."Although cost and availability of funding have remained stable, the speed at which a liquidity event could unfold remains a key concern," the report noted.To mitigate these risks, OSFI's supervisory work will include reviewing contingency funding and recovery plans at banks. "We will assess how internationally active institutions consider geopolitical shocks in their plans. We will also focus on the ability of institutions to report liquidity and funding positions under short timelines, including cross-border exposures," the agency said.OSFI will continue to advance work on liquidity-risk guidance for deposit-taking institutions throughout 2026. The most recent revisions to liquidity adequacy requirements will take effect on May 1, 2026, targeting specific retail deposit categories. The regulator will release further updates to liquidity adequacy requirements for consultation as part of the second quarterly release on May 21.OSFI also plans to release a draft internal liquidity adequacy assessment process guidance for consultation as part of the May quarterly release.Price: $202.70, Change: $+1.16, Percent Change: +0.58%