Regulatory Alerts2019-05-23
Revised Covered Bond Limit Calculation
The Office of the Superintendent of Financial Institutions (OSFI) has updated its covered bond limit calculation by replacing the Assets to Capital Multiple proxy with on-balance sheet assets and adjusting the numerator for overcollateralization. Effective August 1, 2019, deposit-taking institutions must ensure total pledged assets do not exceed 5.5 percent of their on-balance sheet assets, raising the previous 4 percent notional threshold. Institutions must continuously monitor compliance, promptly notify OSFI of any breaches, and align their pledging policies with the revised formula while maintaining unchanged overall issuance capacity.
Share