Canada's OSFI releases draft frameworks to double down on big banks, insurance regulation

June 1 (Reuters) - Canada's banking regulator released drafts for two frameworks focused on big banks and life insurers on Thursday, betting that tighter regulatory requirements would boost investors' and depositors' confidence in the industry.

The draft guidelines from the Office of the Superintendent of Financial Institutions (OSFI) would apply to banks and life insurers that operate internationally but have their parent firms based in Canada.

Also, OSFI will closely assess the standalone financial strength of such parent companies, rather than focusing broadly on the health of their consolidated businesses.

The guidelines would apply to the six largest Canadian banks, including Royal Bank of Canada and Toronto-Dominion Bank, and to some big life insurers, OSFI said.

"These new frameworks... are aimed at helping us better ensure that Canadian banks and life insurers operating overseas are managing risks appropriately," said Peter Routledge, Superintendent of Financial Institutions.

The drafts are open for public consultation till June 30. The regulator will release the final framework later this year, it said.

(Reporting by Niket Nishant in Bengaluru; Editing by Shilpi Majumdar)