The Autorité des marchés financiers (AMF), the organisation responsible for financial regulation in the Canadian province of Québec, has signed a memorandum of understanding (MoU) with the Bank of Canada.
Under the MoU, both the entities will co-operate and exchange information about the monitoring of risks pertaining to domestic systemically important financial institutions (D-SIFIs).
The deal is also expected to support their respective roles as regulator and lender of last resort.
AMF president and CEO Louis Morisset said: “We are pleased to sign this agreement, which is an important collaborative tool to manage systemic risk related to D-SIFIs such as Desjardins Group. The agreement is consistent with actions taken by the AMF to achieve its risk management objectives.
“This is a significant development that will help us prevent and deal with the potential failure of a D-SIFI and strengthen ties with the main members of our financial safety net, namely, the agencies that perform the functions of prudential regulation, supervision, resolution, lender of last resort and deposit insurance.”
Besides creating synergies for the two entities, the deal will foster co-operation and assist in reducing the risks of a financial crisis thereby increasing stability in the Québec financial system.
Furthermore, the MoU intends to fulfil International Monetary Fund expectations under the Financial Sector Assessment Program that aims to increase co-operation among federal and provincial authorities as well as to mitigate risks for D-SIFIs.