Modernizing B.C.’s Capital Framework

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BCFSA is conducting a multi-year initiative to update the capital framework for B.C. credit unions. The Capital Modernization Framework Project will ensure that capital adequacy requirements continue to reflect underlying risks, clarify BCFSA’s expectations, and, as appropriate, reflect developments in international standards and best practices. The ultimate outcome of this initiative is expected to be a new Capital Rule, that will replace portions of the existing Capital Requirements Regulation respecting credit unions.

Modernizing B.C.’s capital framework will:

  • Address new capital adequacy requirements including credit, operational, and market risk that will impact the Internal Capital Adequacy Assessment Process (“ICAAP”) and the determination of Internal Capital Target (“ICT”);
  • Align the B.C. credit union system more closely with international standards, with modifications to accommodate the unique characteristics of the B.C. credit union system;
  • Enhance the loss-absorbing capacity of B.C. credit unions; and
  • Promote the adoption of stronger risk management practices by B.C. credit unions.

BCFSA’s Capital Modernization Project will take place in several phases over the coming years.

Project Launch, Data Analysis and Review

To officially launch the project, BCFSA hosted an information session for all interested stakeholders on Tuesday, June 28, 2022, providing an overview of the project goals and objectives, highlighting the opportunities for stakeholder input, and responding to questions.

This phase of the project will include an analysis of information received from credit unions to identify metrics for consideration in determining appropriate thresholds and risk weights. This analysis will help define the new requirements and more accurately assess their potential impacts on the capital adequacy ratios of credit unions, to support the development of a discussion paper.

Engaging Credit Unions: Working Group

As part of BCFSA’s commitment to engaging proactively with credit unions and other stakeholders throughout the Capital Modernization Framework Project, a diverse group of representatives from B.C. credit unions have been appointed to serve as members of its Credit Union Capital Modernization Working Group (“Working Group”). BCFSA appointed its Working Group members following an open call for members to all B.C. regulated credit unions.

Working Group members will participate in focused discussions and will be invited to provide feedback and impact analysis on targeted topics. Feedback from the Working Group will inform the development of a discussion paper to be released for public consultation in 2023.

More Information


Following this period of development, analysis and review, BCFSA will release its Capital Modernization Discussion Paper for public consultation, providing all stakeholders the opportunity to offer their feedback. All stakeholder input will be carefully considered, and BCFSA will provide feedback to stakeholders about their input, including how it was considered, our response and how it informed the subsequent phases of the project, including the development of a proposed rule.

Learn more about our approach to stakeholder engagement

Rule Making Process and Implementation

The ultimate outcome of this project is expected to be a new Capital Rule,that will replace portions of the existing Capital Requirements Regulation respecting credit unions. Before the implementation of a new rule, BCFSA will engage with stakeholders to help ensure operational readiness.