WRAPUP-Canada ups financial oversight, tags 'too big to fail' banks
* OSFI top six banks "systemically important"
* National Bank included, despite smaller size
* Bank of Canada to formally regulate SwapClear
* Both moves part of broader G20 commitment on regulation
By Cameron French
TORONTO, March 26 (Reuters) - Canadian authorities on Tuesday designated the country's top six banks as "systemically important" to the domestic economy and increased oversight of a widely used global derivatives clearing system in an effort to reduce banking system risk.
The so-called too big to fail designation was widely expected by the market and means the six banks will have to keep more capital on hand than required by the Basel Committee on Banking Supervision after the 2008 financial crisis.
The banks, named soundest in the world for five years running by the World Economic Forum, are already in compliance with Basel III capital requirements. All but one meet the new tougher rules. Neither the United States nor the European Union have formally implemented the Basel standards yet.
"The measures we are announcing today are designed to limit the likelihood that a major bank would encounter distress or failure that could negatively impact the Canadian economy or taxpayers," Julie Dickson, head of the Office of the Superintendent of Financial Institutions (OSFI), said in a statement. Continued...