Regulatory Alerts2025-09-11
Capital Adequacy Requirements (CAR) Chapter 1 – Overview of Risk-based Capital Requirements
OSFI establishes risk-based capital requirements for federally regulated banks, bank holding companies, trust and loan companies to ensure adequate capital through standardized or internal model-based calculations. The guideline defines total regulatory capital as the sum of Tier 1 and Tier 2 components, while risk-weighted assets are derived from credit, market, and operational exposures using either standardized or approved internal approaches. Institutions must maintain minimum capital ratios subject to a 67.5% floor for internal models, alongside mandated conservation and countercyclical buffers plus D-SIB surcharges to mitigate systemic risk.
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