Regulatory Alerts2019-11-01
Large Exposure Limits for Domestic Systemically Important Banks
The Office of the Superintendent of Financial Institutions (OSFI) issued this guideline to establish large exposure limits for Domestic Systemically Important Banks (D-SIBs) on a consolidated basis. It mandates that D-SIBs cap aggregate exposures to single counterparties or connected groups at 15%, 20%, or 25% of Tier 1 Capital depending on the counterparty's status, while requiring timely reporting and robust internal risk management processes. The framework also details specific exemptions for government exposures, high-quality liquid assets, and central counterparties, alongside precise measurement rules for banking book, trading book, and structured vehicle exposures.
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