Canada’s bank regulator boosts efforts to combat money laundering

The head of Canada's banking regulator says he's ramping up scrutiny of money laundering as risks increase. The Bay Street Financial District is shown with the Canadian flag in Toronto on Friday, August 5, 2022.(THE CANADIAN PRESS/Nathan Denette)

“Canadian Banking Regulator Cracks Down on Money Laundering”

The head of Canada’s banking regulatory agency, Peter Routledge, has announced a heightened focus on combating money laundering in the financial sector. With the increasing sophistication of money laundering techniques and the evolution of artificial intelligence, regulators and financial institutions are facing challenges in keeping up with criminal activities.

Amping Up Scrutiny

Routledge expressed the need for a proactive approach to combat the ever-evolving tactics of money launderers. He emphasized the urgency of tightening regulations to address the escalating risks. As part of this effort, the Office of the Superintendent of Financial Institutions (OSFI) has expanded its focus following the amendment of its mandate to explicitly include monitoring financial institutions’ protection against threats to their integrity and security.

Collaboration and Enforcement

In response to the escalating risks, the regulator will work more closely with Fintrac, Canada’s financial intelligence agency, to address the higher risks of money laundering in a digitized and integrated global economy. Additionally, OSFI will be delivering a clear message to financial institutions, urging them to step up their efforts to combat money laundering.

The Scale of the Issue

Routledge highlighted the staggering scale of money laundering in Canada, which has been estimated to range from $45 billion to $113 billion. These estimates are based on the UN’s findings that between two and five percent of global GDP is laundered annually. The need for regulatory action to counteract the financial risk posed by money laundering is more critical than ever.

Climate-Related Risks

In addition to money laundering, Routledge also emphasized the increasing focus on climate-related risks. OSFI has mandated that major banks prepare climate disclosures and transition plans to inform potential measures and decisions on capital buffers. The regulator acknowledged that addressing climate-related risks would be a multi-year process, requiring boards to envision different futures and transitions to adapt to potential changes.

A Call to Action

As a parting message, Routledge emphasized the importance of instituting sound risk management practices for new and emerging risks. He underscored the need for institutions to take responsibility for complying with anti-money laundering laws within the jurisdictions in which they operate.


The escalating risks of money laundering and climate-related financial risks have prompted the Canadian banking regulator to take decisive action. By collaborating with financial intelligence agencies and urging financial institutions to intensify their efforts, OSFI is proactively addressing these challenges head-on. As the financial landscape continues to evolve, it is imperative for institutions to adapt and remain vigilant against these emerging risks.



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