Summary of remarks by Peter Routledge at the 2024 TD Securities Annual Financial Services Conference

On January 19, 2024, the Superintendent of Financial Institutions, Peter Routledge, sat down for a fireside chat at the 2024 TD Securities Annual Financial Services Conference. During the talk, he touched on the domestic stability buffer (DSB), the housing market, modernizing the Office of the Superintendent of Financial Institution’s (OSFI) supervisory framework, the commercial real estate market, and climate risk.

Superintendent Routledge spoke about the decision to set the domestic stability buffer to 3.5% in June 2023 and to maintain that level in December 2023. He explained that both decisions reflected OSFI’s assessment that while systemic vulnerabilities were heightened, near-term risks were low and stable.

Superintendent Routledge addressed housing concerns, particularly heightened risks relating to variable rate mortgages with fixed payments and extended amortization periods. Residential mortgage lending has been identified consistently as a top risk in OSFI’s Annual Risk Outlook and its fall update. High household debt is still relevant to credit risk, the safety and soundness of federally regulated financial institutions, and the overall stability of the financial system.

Superintendent Routledge noted that this year, OSFI released Guideline B-15, issued its first formal regulatory notice on the commercial real estate market, established the Climate Risk Hub to address climate-related financial risks and began the process of modernizing its Supervisory Framework to ensure it remains fit for purpose.

Quote

“For OSFI to fulfill its purpose, we must ensure Canadian financial institutions manage the risks that could impact their safety and soundness. We will approach all risks using the same risk management principles.”

- Peter Routledge, Superintendent