Supervisory stress testing is a technique used to assess the robustness of financial institutions and the broader financial system to severe but plausible shocks. Since the Global Financial Crisis of 2008, it has emerged as an important tool for supervisors that complements other approaches and methods. Stress testing is one of the more complex tasks undertaken by supervisory authorities. Primarily used to inform solvency and liquidity adequacy assessments, it is also a critical method for exploring emerging risks and the threats they pose to financial institutions. This TC Note and accompan ..read more

Liquidity is fundamental to the operation of financial institutions. Problems can quickly arise and escalate, threatening the stability of the financial system. This TC Note and accompanying podcast focuses on good practices in liquidity management by financial institutions in the banking, insurance, pensions, and securities sectors. It provides guidance on how supervisors should assess liquidity management, including the use of scenario analysis and stress testing. Lessons learned from recent high-profile financial institution failures are explored. Speaker:  Paul Wright,&nbs ..read more

The world's most economically vulnerable populations are frequently impacted by natural catastrophes (NatCats). The International Association of Insurance Supervisors' (IAIS) recent report, A call to action: the role of insurance supervisors in addressing natural catastrophe protection gaps, outlines actions insurance supervisors can take. The speakers discuss key takeaways from the report including: How closing the protection against gap for natural catastrophes could improve financial stability, particularly for emerging markets and developing economies The importance of improving co ..read more

Experts from the development and financial supervision sectors discussed some of the challenges and solutions for farmers from emerging markets and developing economies in accessing finance to adapt to climate change. Key takeaways from this insightful conversation include the need to: Build a common vision and establish a dialogue between supervisors and the market Increase access to finance for small holder farmers through safe digital solutions Implement gender-inclusive policies to address specific barriers women face Toronto Centre and MEDA co-hosted this event as part of&nb ..read more

The International Sustainability Standards Board (ISSB) has developed new standards for sustainability reporting and climate-related disclosure. This new TC Note and accompanying podcast discuss the benefits, challenges, and actions needed for the standards to reach the goals they were set out to meet. They outline how the standards can help achieve the following key supervisory goals: Investor and consumer protection Safety and soundness of financial institutions Financial system stability and alignment with national climate targets Speaker:  Alison Harwood, Program Leader, Toron ..read more

Emerging Markets and Developing Economies (EMDEs) are facing numerous hurdles in mobilizing the necessary transition financing for decarbonization, including fiscal constraints, restricted access to private capital, and a shortage of expertise in project development and financing. Ramping up blended finance efforts is critical for this transition. The panel discussed: some practical examples of successful blended finance transactions; and, the role that financial regulators and supervisors can play in creating a conducive and stable environment for these transactions.  Panelists: Laura San ..read more

This TC Note and podcast address issues encountered by introducing risk-based supervision. These range from technical matters to more complex challenges, such as: appropriate calibration of ratings; risk-management controls; managing on- and off-site work; significant enterprise-wide activities; treating ‘unsupervisable’ structures; independent local boards; and upstreaming of profits to parent institutions. Speaker:  Paul Wright, Program Leader, Toronto Centre Host:  Chuin Hwei Ng, Senior Program Director, Toronto Centre Read the transcript here. Read their ..read more

This TC Note and podcast brings together principles and practices related to financial sector oversight that are relevant to financial inclusion, including proportionate regulation, risk-based supervision, and consumer empowerment. They emphasize the need to understand and manage linkages and trade-offs between different policy areas, and cover some cross-cutting issues that supervisors are facing, such as new innovations and sources of competition, gender disparities in financial inclusion, and the role of financial inclusion in crisis responses. Speaker:  Laura Brix Newbury, Progr ..read more

The Intact Centre for Climate Adaptation at the University of Waterloo recently released a report on Integrating Physical Climate Change and Extreme Weather Risk into Institutional Investing. The report examines the strategic and financial impact physical climate risks have on businesses. In this podcast, the speakers address some topics financial supervisors and regulators should consider: the impact of physical climate change and extreme weather risk on the financial sector; the state of global disclosures and frameworks; and, tools available to reduce risk. Speaker:  Kath ..read more

A ..read more