Finance committee  Yes, it's happened in Canada before. It hasn't happened for a long time, but it has happened.

Finance committee  We saw it last month.

Finance committee  Yes, I live that every day.

Finance committee  Yes.

Finance committee  Traditionally, bank and insurance company regulators look at credit risk, which is the risk that you make a loan and people don't pay you back; investment risk, which is the risk that you make an investment and you lose money; and liquidity risk, which is the risk that someone as

Finance committee  There are a variety of implications. To the point that was made earlier, some institutions would still get at this and would manage their balance sheets in a pretty responsible way. My experience is that if you don't have rigorous regulations, there are always institutions that

Finance committee  I'll answer the second part of your question first. Measuring the exact cost is not something we've asked them to do. The institutions we regulate are more than happy to come to us to tell us what the burden is. To go more deeply into that question, I'd like to reference one key

Finance committee  Yes. Over time, there will be a rising burden around scenario analysis. The diligence and risk intelligence that will come out of that will produce lower credit costs, we believe, over time, which will more than pay for the additional costs. Even if we didn't oblige them in the

Finance committee  That's a good question. There are a variety of reasons for that. The first one, as I said in my opening statement, is that we have a bias towards earlier action. Our system will be sounder if we oblige the institutions we regulate to move earlier and sooner on this and to begin

Finance committee  To answer that question, I'd like to spend just a minute or two—

Finance committee  Okay. I'll try to be very brief. Capital risk weightings are very technical. They're built bottom-up from historic credit analysis. That's—

Finance committee  We're not changing that approach.

Finance committee  We will always be empirically driven in our credit risk rates. The problem is that credit risk analysis is driven by historical data. The unique feature of climate risk is that we're talking about events that haven't happened yet, and we're trying to make predictions about the f

Finance committee  Thank you. Good morning, Mr. Chair, ladies and gentlemen, members of the committee. Thank you for the opportunity to speak about the Office of the Superintendent of Financial Institutions and its approach to climate change. I am joined by my friend and colleague Stéphane Tardif,

Finance committee  Mr. Chair, that's confirmed. We're looking into it right now as I speak.