The Canadian Securities Administrators (CSA) has released its 2023 Annual Report on Capital Markets.
The report delves into the latest financial market trends, identifies critical vulnerabilities within the Canadian capital markets, and outlines the measures the CSA has implemented to address these challenges and associated risks.
The annual report brings to light several key trends and vulnerabilities shaping the Canadian capital market landscape. Notable among these are the transition of benchmark risk-free interest rates, liquidity risks, and the pressures exerted by higher interest rates and tighter monetary conditions. Despite these challenges, the report provides a reassuring assessment that financial stability risks in Canadian capital markets remain well-managed and contained.
Stan Magidson, CSA Chair and the Chair and CEO of the Alberta Securities Commission, emphasized the importance of systemic risk mitigation as a fundamental aspect of the CSA’s mandate.
“The mitigation of systemic risk is a core component of the CSA’s mandate. Observations contained in this report are essential to practices that support the reduction of financial vulnerabilities,” Magidson said.
Since its establishment in 2009, the CSA's Systemic Risk Committee has served as the primary platform for analyzing and monitoring systemic and emerging risks within the markets. In 2022, the committee launched an annual systemic risk survey that solicits views on financial risks from market participants as part of its efforts to deliver on its mandate.
Furthermore, the CSA actively collaborates with other regulatory bodies at both federal and provincial levels to monitor emerging and systemic risks effectively and to develop strategies for risk mitigation. This collaborative approach is facilitated through direct engagements and participation in the Heads of Regulatory Agencies (HoA) Committee and its Systemic Risk Surveillance Committee (SRSC).
For those interested in a deeper understanding of the systemic risks within the Canadian capital markets and the CSA's efforts to mitigate them, the 2023 Annual Report on Capital Markets is available on the CSA website.