Canada's banking regulator lowers stability buffer for big banks, allowing them to lend more
OSFI said the cut gives Canada’s six largest banks about C$74 billion in excess capital to support lending and investment.
- On Friday, the Office of the Superintendent of Financial Institutions lowered the domestic stability buffer to 3% from 3.5%, giving Canada's six largest banks greater flexibility to deploy capital.
- Superintendent of Financial Institutions Peter Routledge said the move supports Canada's economic adaptation, directing capital toward defense spending, critical infrastructure, and artificial intelligence as trade routes shift.
- The decision allows the six largest banks to hold $74 billion in excess capital and increase risk-weighted assets by $673 billion, while lowering the common equity tier 1 capital ratio requirement to 11% from 11.5%.
- Banks currently maintain capital cushions averaging 13.5%, well above new requirements, signaling Routledge's confidence in the banking system's health to take risks without regulatory impediment.
- The regulator narrowed the buffer range to 0% to 3% from 0% to 4%, providing banks long-term certainty as Prime Minister Mark Carney seeks to bolster Canada's waning productivity and economic growth.
21 Articles
21 Articles
The Toronto Star
Federal banking regulator OSFI lowers domestic stability buffer to three per cent
Canada's federal banking regulator says it's lowering its domestic stability buffer to three per cent from 3.5 per cent, a move it says will give the country's six largest banks
Federal Banking Regulator OSFI Lowers Domestic Stability Buffer to Three Percent
Canada’s federal banking regulator says it’s lowering its domestic stability buffer to three percent from 3.5 percent, a move it says will give the country’s six largest banks greater flexibility to deploy capital. The Office of the Superintendent of Financial Institutions says it’s the first change to the domestic stability buffer since June 2023 and takes effect today. The regulator also narrowed the potential range of the buffer to between ze…
‘Take Risk’: Canada Regulator Cuts Bank Capital Level to Boost Lending
Canada’s financial regulator lowered capital requirements for the country’s largest banks for the first time in three years, giving them flexibility to lend more to support a domestic push for defense spending, critical infrastructure and artificial intelligence.
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