Release of the 2020 Bank of Canada FMI Oversight Activities Annual Report
The Bank of Canada today published the Bank of Canada Oversight Activities for Financial Market Infrastructures 2020 Annual Report. The Report reviews the Bank’s oversight of designated clearing and settlement systems, also known as financial market infrastructures (FMIs).
The Bank has a mandate to ensure that designated FMIs are following sound risk management practices. The Report, which outlines how the Bank fulfills this mandate, provides stakeholders with information about:
- the Bank’s approach to oversight of FMIs
- the resilience of designated FMIs during the COVID-19 pandemic in 2020
- improvements that designated FMIs made to their risk management practices in 2020
- ongoing and new expectations set by the Bank for designated FMIs to enhance their risk management practices in 2021 and beyond
- other activities conducted by the Bank in relation to its mandates for FMI oversight, resolution and crisis preparedness
Given the unprecedented circumstances brought about by COVID-19 in 2020, the Report discusses the effects of the pandemic on designated FMIs and outlines the measures they undertook to maintain operational resilience. Since the onset in March 2020, designated FMIs have successfully transitioned to remote work environments and have operated without major disruptions, despite volatility in the value and volume of transactions. The Bank will continue to monitor the evolving situation and ensure that designated FMIs are adequately controlling their risks.
Throughout the year, designated FMIs continued to make progress on key priorities, including modernization initiatives. In addition, they improved their risk management practices, addressing several gaps the Bank had previously identified.
The Bank made significant progress on its own priorities pertaining to the oversight, resolution and crisis preparedness of FMIs. Notably, the Bank:
- designated Interac e-Transfer® as a prominent payment system
- published a guideline on its role as the FMI resolution authority
- contributed to the efforts of international committees
- continued its work on strengthening FMI cyber resiliency
- conducted research to deepen the understanding of issues related to FMIs and the Bank’s oversight function