Regulatory Alerts2020-04-09
Additional Capital and Prudential Measures for Deposit Institutions and Trust Companies – COVID-19
The Autorité des marchés financiers has introduced additional capital and prudential measures for Québec’s deposit institutions, trust companies, and credit unions to mitigate the financial impact of COVID-19. The notice temporarily excludes central bank reserves and high-quality liquid assets from leverage ratio calculations, lowers the risk-weighted capital floor factor to 70 percent, caps expected credit loss add-backs at 70 percent, and extends initial margin implementation for over-the-counter derivatives to September 2022. These retroactive measures, effective from March 31, 2020, ensure institutions retain sufficient capital to support lending and financial intermediation while maintaining overall financial resilience.
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