"A little-known fact is that several years ago OSFI encouraged Home Capital to broaden its funding sources by growing demand deposits. Historically, almost all of Home Capital’s funding came from fixed-term deposits (GICs) which were locked in and closely matched to the term of the company’s assets (mortgage loans). In the past month, $591-million of those demand deposits have been demanded by customers and are now gone." ... "The irony here is that OSFI’s goal of reducing risk by having Home Capital diversify its funding sources may have perversely contributed to the current run on the company’s funding."

Heads should roll at OSFI!