TORONTO May 14 Canada's financial regulator has issued guidelines that ensure it will have input in the hiring of senior management at Canada's banks and insurers, although it said final hiring decisions will be in the bank's hands.
The guidelines, issued by the Office of the Superintendent of Financial Institutions (OSFI), will require financial institutions to notify the regulator in advance of potential senior executive hires or director candidates.
"To the extent that OSFI may have any specific concerns or comments regarding the appropriateness of a candidate, OSFI will inform the board of the (financial institution) prior to the candidate's appointment or nomination for election," the regulator said in an advisory.
OFSI may also request a meeting with new executives shortly after they start the new job.
The regulator stressed that decisions on hiring and appointments "remain with (financial institutions) themselves."
The new guidelines are a retreat from proposed rules released in January that would have forced institutions to provide 30 days notice before any senior hire, as well as reasons for a candidate's selection.
The Canadian Bankers' Association, a lobby group for the industry, said in an email it was discussing the new requirements with its members.
The new rules continue a major overhaul of bank regulations that include tighter capital and liquidity rules, as well as stricter rules on mortgage lending.
While Canada's financial sector escaped the financial crisis relatively unscathed, the strong run of the country's housing sector, combined with massive condominium construction in cities like Toronto and Vancouver, has raised worries. (Reporting by Cameron French; Editing by David Gregorio)