Regulatory Alerts2025-09-11
Capital Adequacy Requirements (CAR) (2026) – Chapter 4 – Credit Risk Standardized Approach
The Office of the Superintendent of Financial Institutions (OSFI) establishes comprehensive risk-weighting rules for credit exposures under its Capital Adequacy Requirements Chapter 4, applying to federally regulated banks and small-to-medium deposit-taking institutions. Institutions must assign risk weights ranging from zero to one hundred fifty percent based on external credit assessments, specific allowance treatments under IFRS 9, and defined asset class classifications. The guideline mandates robust due diligence processes, introduces simplified capital treatments for eligible SMSB exposures up to five hundred million dollars, and aligns domestic regulatory expectations with the Basel Committee’s standardized framework.
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