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Branches (Operating on a Branch Basis): Branches are integral parts of an institution, as opposed to subsidiaries or joint ventures. Canada now allows foreign banks to apply for the right to directly operate via branches in this country as well as via representative offices or separately capitalized subsidiaries.
Deposit-taking Institutions: Deposit-taking institutions take money from individuals or corporations in the form of deposits or similar financial instruments that are repayable at some time in the future. In Canada, banks, trust and loan companies, and credit unions are deposit-taking institutions.
Demutualization: The process whereby a mutual insurance company converts to a stock company. A mutual company is owned by its participating policyholders, and can issue debentures and similar financial instruments, but not common stock. A stock company is owned by stockholders and can issue debentures, common stocks and a wide variety of related financial instruments.
MCCSR: The Minimum Continuing Capital and Surplus Requirement is a measure of capital adequacy for life insurance companies. It is a risk-based minimum requirement determined by applying factors for a number of risk components to specific on- and off-balance sheet assets or liabilities.
Regulation: Regulation is the setting of rules of good prudential behaviour for financial institutions and pension plans. This involves input into developing and interpreting legislation and regulations, issuing guidelines and considering requests from institutions and pension plans as required by law.
Staging (Staged Institutions): Staging is OSFI terminology for placing an institution on a graduated watch list, where each graduation, or stage, indicates more serious financial difficulty and more aggressive supervisory intervention. Five stages are outlined in the Guide to Intervention for Financial Institutions . Staged institutions are those where problems have been identified (i.e., at Stage 1 or higher).
Tier 1 and Tier 2 Capital: These are components of capital for both deposit-taking institutions and insurance companies. Tier 1 (core capital) comprises the highest quality capital elements, and is regarded as permanent capital, while Tier 2 (supplementary capital), though contributing to the overall strength of a company, does not fully meet OSFI 's considerations for highest quality capital. |