2023-09-30

Parental Stand-Alone (Solo) TLAC Framework for Domestic Systemically Important Banks

The Office of the Superintendent of Financial Institutions (OSFI) requires domestic systemically important banks to maintain a minimum 21.5% Parental Stand-Alone Total Loss Absorbing Capacity ratio on a standalone legal entity basis. The framework calculates this risk-based ratio by adjusting consolidated capital and risk-weighted assets for foreign subsidiaries, branches, guarantees, and non-regulated entities to verify the parent's capacity as a source of strength. Implemented on November 1, 2023, the guideline ensures orderly resolution of non-viable banks while protecting depositors, policyholders, and senior creditors from financial sector instability.

Canada

Office of the Superintendent of Financial Institutions

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