As global policymakers come to grips with traditional financial institutions’ exposure to crypto markets, the Office of the Superintendent of Financial Institutions (OSFI) is consulting on how banks and insurers should be publicly disclosing their cryptoasset exposures.
“Recent crypto events underscore risks of unregulated financial innovation,” OSFI said in a release. “Public disclosures enhance transparency, comparability of data, and market discipline for a safer financial system.”
The consultation is taking place alongside the Basel Committee on Banking Supervision’s own consultation into disclosure expectations for global banks.
OSFI said that by running its consultation in parallel with the Basel Committee, it can combine the feedback it receives on its review with the Basel Committee’s work, which “will help us articulate public disclosure expectations appropriate for banks and insurers in Canada.”
“Public disclosures are crucial for managing risks in banks and insurers, especially regarding crypto-asset exposures. We welcome feedback to tailor disclosure expectations to the Canadian context,” said Peter Routledge, OSFI’s superintendent of financial institutions, in a release.
The consultation comes on the heels of OSFI’s recent consultation on planned guidance for the capital and liquidity treatment of cryptoasset exposures for banks and insurers.
OSFI noted that it will issue draft guidance on public disclosures by the fall of 2024, with the final requirements taking effect in the fourth quarter of 2025.
The deadline for providing feedback to OSFI is Jan. 31, 2024.