Canada's Office of the Superintendent of Financial Institutions has lowered the Domestic Stability Buffer for Canada's six largest banks to 3.0% of total risk-weighted assets from 3.5%, effective immediately. It also reduced the buffer's operating range to 0 to 3% from 0 to 4%. The move gives domestic systemically important banks more room to use capital while keeping a supervisory expectation that they maintain Common Equity Tier 1 ratios above 11.0%. This is the first change to the buffer since June 2023. OSFI said the decision reflects the continued strength of the large-bank sector, with average Common Equity Tier 1 ratios of 13.5%, well above the new supervisory expectation. It said that surplus capital amounts to about CAD 74 billion, or capacity to expand risk-weighted assets by CAD 673 billion, and that lowering the buffer is intended to give banks greater flexibility to support economic adjustment in areas such as defence and security, critical infrastructure, resources and artificial intelligence.
Office of the Superintendent of Financial Institutions2026-06-19
Canada's Office of the Superintendent of Financial Institutions lowers Domestic Stability Buffer to 3.0% and narrows range to 0 to 3%
Canada's Office of the Superintendent of Financial Institutions cut the Domestic Stability Buffer for the country's six largest banks to 3.0% from 3.5% and reduced the range to 0 to 3% from 0 to 4%, effective immediately. OSFI linked the move to strong sector capital levels, with average Common Equity Tier 1 ratios at 13.5%, and said it is meant to free up capital deployment capacity.