On 10 December, the Office of the Superintendent of Financial Institutions (OSFI) issued the final regulatory requirements for Canadian banks under Basel III, effective first quarter 2013. The announcement comes just after recent statements from the U.S. and Europe that they will delay implementation.

While the Basel agreement allows for a lengthy phase-in period, OSFI said its supervisory expectations are being accelerated due to the strong position of Canada's banks, and the benefits associated with early adoption. "Canada feels it should continue to be the best in the world. Regulators feel [Canada] should be the best," one banker noted, preferring to speak anonymously given the sensitivity of the topic. Nevertheless, "There are a lot of questions floating around," said one senior credit executive. "Why are we doing this to ourselves, especially now when other jurisdictions are pulling back?"

Society of Canadian Treasurers study
In response to questions from members, the Society of Canadian Treasurers (SCT) has embarked on a research process designed to ascertain some answers regarding the scope and depth of the potential effects of the new capital and related liquidity requirements on our community of practitioners. SCT spoke with representatives of eight financial institutions, among them some of Canada's – and the world's – largest banks, to gain insight into how the OSFI's January 2013 deadline for implementing Basel III capital requirements will affect financial institutions' approach to corporate cash, credit and liquidity management. Many of the bankers interviewed requested the discussions to remain on the background given the extreme sensitivity surrounding this issue. This guide summarizes their responses, as well as reactions by other financial practitioners to the impending changes.

 

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Now that's a report I'd be interested in reading. Anybody got a copy (only available to SCT members)? And there is also a webinar 'Canada First: Basel III's implications' on February 7th.