CANADA - The Office of the Superintendent of Financial Institutions Canada (OSFI) has urged institutional investors to learn the lessons from the credit crisis by carrying out due diligence.
Julie Dickson, superintendent of financial institutions, said recent events clearly showed the need to know what risk has been transferred and whether it could come back to bite investors.
Dickson said: “Among the lessons are that you should not depend solely on the rating of a reinsurer. That is not due diligence. Think about what could go wrong. Make sure you understand the fine print and get rid of any ambiguous words.
“Despite headlines suggesting lax rules, loose rules or different rules. Canadian rules are robust and aligned with international standards.”
She added that history had shown that each bout of turmoil taught new lessons and this was what OSFI was focusing on both in Canada and internationally.
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