Canada’s Bank Regulator to Begin Daily Liquidity Checks with Banks Following SVB Collapse: Report

Canada’s Bank Regulator to Begin Daily Liquidity Checks with Banks Following SVB Collapse: Report
Police officers leave Silicon Valley Bank's headquarters in Santa Clara, California, on March 10, 2023. (Noah Berger/AFP via Getty Images)
Peter Wilson
3/14/2023
Updated:
3/15/2023

Canada’s banking regulator is taking steps toward carrying out daily check-ins with banks in the country to monitor their liquidity following the collapse of the American-based Silicon Valley Bank (SVB), according to media reports.

The move by the Office of the Superintendent of Financial Institutions (OSFI) to more closely monitor the financial health of domestic banks comes just days after it announced that it would be taking temporary control of SVB’s Canadian branch assets.

OSFI also issued notice on March 12 that it is seeking to make permanent the now-temporary asset seizure and that it is requesting Attorney General David Lametti apply for a Winding-Up Order.

On March 14, the Globe and Mail reported that OSFI is now working toward establishing daily check-ins with domestic banks that will allow it to monitor the banks’ liquidity.

The information was acquired from two sources with knowledge of OSFI’s decision, the Globe wrote, whom it did not name as they were not authorized to speak on regulatory matters.

The Epoch Times contacted OSFI to confirm the Globe report. In an emailed response, the office did not directly confirm the report but said that it is “always monitoring the liquidity of the institutions it regulates.”

“As risks change, so do the frequency and intensity of these efforts. Such adjustments reflect a prudent approach to performance of its supervisory function,” the regulator wrote on March 14.

“As part of this work, we are regularly in contact with the financial institutions we supervise. Under the OSFI Act, we are bound by legislation and regulation to keep the information we gather confidential.”

Peter Routledge, Canada’s Superintendent of Financial Institutions, reiterated on March 12 that SVB’s branch within the country doesn’t accept deposits from Canadians.

He said in a statement that he seized SVB’s Canadian assets to preserve their value following the decision by the California Department of Financial Protection and Innovation to shut down the bank.

“By taking temporary control of the Canadian branch of Silicon Valley Bank, we are acting to protect the rights and interests of the branch’s creditors,” he said in the March 12 release.

He added that OSFI’s seizure of SVB’s assets in Canada was solely a “result of circumstances particular to Silicon Valley Bank in the United States.”

Finance Minister Chrystia Freeland met with Routledge and representatives from the Bank of Canada the day after OSFI seized the SVB assets.
Freeland said on March 11 that the country’s financial institutions are “stable and resilient,” according to a spokesperson from her office, who said there are “significant structural and regulatory safeguards” in place to prevent Canadian banks from collapsing.
The Canadian Press contributed to this report.