# How does OSFI ensure banks are following these guidelines?

> OSFI monitors banks to ensure they are financially sound and comply with regulations; If a bank doesn't manage mortgage risks properly, OSFI can take action, such as increasing capital requirements.

Category: Regulatory
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/regulatory/how-does-osfi-ensure-banks-are-following-these-guidelines

## Answer
OSFI monitors banks to ensure they are financially sound and comply with regulations; If a bank doesn't manage mortgage risks properly, OSFI can take action, such as increasing capital requirements.

## Institutional highlights
- Your bank needs a solid plan for approving mortgages that fits how much risk they're willing to take.
- Banks should be extra careful when dealing with riskier mortgages, keeping a close eye on them.
- Banks need to have enough money set aside to cover potential losses from their mortgages.
- The government can make banks fix any problems to keep the financial system safe and encourage them to manage risk well.

## Related guide
- https://ratellow.com/guides/stress-test-explained-2026

## Sources
- OSFI exempts uninsured mortgage straight switches from the prescribed MQR and implements portfolio LTI limits — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- Mortgage insurance — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.5.1