The Office of the Superintendent of Financial Institutions (OSFI) has published a stakeholder satisfaction survey that gives the regulator overall high marks, and highlights the risks bank and insurance company CEOs foresee.

Overall, the survey suggests that the CEOs that are subject to OSFI regulation are satisfied with its performance. It reports that impressions of OSFI on most of the measures tested are strong, with OSFI receiving combined “top two” ratings of at least 80%.

For example, 87% are “very” or “somewhat” satisfied with OSFI as a regulator and supervisor of Canada’s financial services industry; and 88% said their impressions of OSFI’s overall performance in contributing to public confidence in Canada’s financial services industry is “very good” or “good”.

But there are three measures on which OSFI receives somewhat lower ratings. Just 65% provide a “good” or “very good” rating on the regulator responding in a timely manner to market changes or to industry suggestions that regulations and guidance need updating; only 61% give top two ratings for its performance developing regulations and guidance that strike an appropriate balance between prudential considerations and the need for institutions to compete; and 61% also give top two ratings for its ability to develop regulations and guidance that are clear and easy to understand.

Additionally, CEOs suggested a wide array of risk areas that they believe should be priorities for OSFI in the next couple of years.

The most frequently mentioned concerns are:

  • the implementation of IFRS; market risk, including the low interest rate environment and liquidity crisis;
  • capital requirements, flowing from the implementation of IFRS, and the way capital is calculated;
  • regulatory risk stemming from the regulatory burden imposed by OSFI, and the tension between respective requirements of federal and provincial regulators;
  • catastrophic risk, such as natural diasters, climate change, pandemics and terrorist incidents; and;
  • complex financial instruments and products.

IE