Canadian Banking Supervisory Authority Tightening Controls After SVB Collapse

Moscow, March 14 – Canada’s banking regulator is stepping up its grip on the financial health of local banks amid the collapse of the US Silicon Valley Bank, the Globe and Mail reports, citing sources.

Earlier, the country’s Office of the Superintendent of Financial Institutions (OSFI) said that Canadian authorities had taken temporary control of a local branch of the bankrupt US Silicon Valley bank.

“OSFI has informed banks that, from Tuesday until further notice, they will be required to submit daily liquidity reports to the regulator,” the post reads. According to the sources, the increase in controls does not mean that there is any urgent problem for the sector.

According to the publication, Deputy Prime Minister of Canada Chrystia Freeland has already met with heads of financial institutions and representatives of the Bank of Canada, as well as with the head of OSFI.

Earlier, as reported by the US Federal Deposit Insurance Corporation (FDIC), regulators in California closed SVB, which became the largest bank collapse in the US since the last financial crisis. All SVB-insured deposits were transferred to a separate structure – the National Deposit Insurance Bank of Santa Clara. The collapse of the SVB turned out to be associated with an increase in the Fed’s key interest rate, which led to a depreciation of assets on the balance sheets of many financial institutions. Bank losses in 2022 totaled $620 billion, according to the Federal Deposit Insurance Corporation (FDIC).