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Published on: 8/1/1999
Last Visited: 7/14/2001
John Thompson , deputy superintendent at the Office of the Superintendent of Financial Institutions ( OSFI ) , admits his office has not been overly reactive to finite and other ART risk transfer products.OSFI has reviewed few of these deals , mainly due to the inactive market , he says.OSFI doesn't drive the bus -- the innovation has to come from the industry -- we merely react to events.We haven't seen many of these programs being brought forward..
However , Thompson points out , OSFI's prime concern with finite and other ART products is that the risk is not sufficiently transferred from the buyer to the underwriter.Our concern is that , if a company is going to transfer risk from its balance sheet , we've got to be satisfied that it is indeed the case..
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In a sense , yes , Thompson concedes , there's probably a need to lay down regulation for consistency in this issue.There has not been any official contact between Canadian regulators to deal with this...the U.S. has been more active on regulations as it is a more mature market.The U.S. market also offers greater diversity , this pressure has not been as heavy on regulators in Canada..
Risk managers take tentative steps.
While the product makers of finite programs are optimistic of their future in Canada , risk managers are less confident.
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