The Globe and Mail reports in its Tuesday, Feb. 5, edition that the Office of the Superintendent of Financial Institutions is proposing tougher rules governing deposits sourced on-line or from third party brokers.
The Globe's James Bradshaw writes that if approved, banks would be required to hold 20 per cent to 40 per cent of deposits gathered from unaffiliated brokers or Internet-based accounts as a buffer against sudden withdrawals that could put a lender at risk.
However, banks are voicing concerns about some aspects of OSFI's proposals, fearing they could disproportionately handcuff smaller financial institutions, hampering efforts to encourage greater competition with Canada's biggest banks. As a result, the proposed rules could also indirectly influence the interest rates and terms consumers are offered on deposits.
Although all banks would be affected, the impact could be felt most acutely by institutions such as Home Capital, Equitable Bank and Manulife Bank of Canada, depending on each institution's funding strategies. Low-cost on-line banks Tangerine and Simplii Financial, which are owned by Bank of Nova Scotia and Canadian Imperial Bank of Commerce, may also be more exposed.
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