OSFI has released an Advisory titled Treatment of non-qualifying capital instruments: This Advisory does not apply to regulated life insurance companies, insurance holding companies, federally regulated property and casualty insurance companies or cooperative credit associations. …
Category: Regulation
BIS Finalizes Tier 1 Loss Absorbancy Rules
The Bank for International Settlements has announced: minimum requirements to ensure that all classes of capital instruments fully absorb losses at the point of non-viability before taxpayers are exposed to loss. This is yet another …
Lloyds Bank to Issue Contingent Capital with Tier 1 Ratio Trigger?
Lloyds Banks has announced: Lloyds Banking Group (Lloyds) notes recent media speculation regarding its proposed potential participation in the Government Asset Protection Scheme (GAPS). Lloyds is in advanced discussions with HM Treasury, UK Financial Investments …
OSFI Loosens Rules on Innovative Tier 1 Capital
OSFI has released Advisories on Innovative Tier 1 Instruments. I have not yet reviewed the intricacies of the advisories, but it appears that the the draft advisory I thought was so appalling has been adopted …
TD Capital to Issue Asset-Backed Tier 1 Paper
TD has announced: that TD Capital Trust III, a subsidiary of TDBFG, and TDBFG have filed a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada with respect …
OSFI Disgraces Itself Again
I did not think it was possible for OSFI to bring greater disgrace upon itself than it did in the debate over a Principal Loss Absorbency Mechanism (PLAM) for insurers, which would have applied NVCC-like …
NVCC: “Minimum Reset Guarantee” = “Incentive to Redeem”?
I have long accepted that banks cannot offer minimum reset guarantees on their FixedResets because this is considered to be an incentive to redeem by the regulators. I’m almost certain that I saw an authoritative …
NVCC & Credit Suisse
OSFI has announced: OSFI is issuing this statement to reinforce guidance around the design of the regulatory treatment of Additional Tier 1 and Tier 2 capital instruments. Canada’s capital regime preserves creditor hierarchy which helps …
OSFI Revises Rules for LRCNs; Finally Provides Information for Insurers
The Office of the Superintendant of Financial Institutions Canada (OSFI) has announced: OSFI has published an update to its July 18, 2020 capital ruling on the Limited Recourse Capital Notes (LRCNs). The revised ruling now …
IAIS Says No To DeemedRetractions
The International Association of Insurance Supervisors has released a bevy of documents related to the supervision of Internationally Active Insurance Groups. Of these, the most important for our purposes is the “Technical Note on ICS …