Revision of Canadian covered bond limit could help smaller banks

By Bill Thornhill
28 May 2019

The Office of the Superintendent of Financial Institutions (OSFI) in Canada has increased covered bond issuance limits which should improve issuance flexibility among Canada’s smaller banks — leading to possible issuance from names like Equitable Bank among others.

On May 23 OSFI raised the covered bond issuance limit from 4% of assets on balance sheet to 5.5% effective from August 1 2019. 

The regulator said its decision was predicated on the fact that assets encumbered by covered bonds includes overcollateralization and “by definition, this amount will ...

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