AI & Lending

The risk that defined three years is over

On May 28, 2026, the Bank of Canada released its 2026 Financial Stability Report. The report is the BoC's annual read on systemic risk, and this year's edition contains a sentence every Canadian lender should print out and put on the wall: "we expect this risk to have fully passed by the second half of 2027."

Concerns about climate-related risks have been growing within the financial sector for many years, particularly in the insurance sector. However, at COP26 in Glasgow, the broader financial sector was a key part of the discussions that have reinforced the recommendations of the Task Force on Climate-related Financial Disclosures and the importance of monitoring and reporting associated risks. Integral to these processes is OFSI’s first Annual Risk Outlook where climate change-related risks are prominent.