The Office of the Superintendent of Financial Institutions lowered the Domestic Stability Buffer for Canada’s six systemically important banks to 3% from 3.5% of total risk-weighted assets, effective June 19, 2026. It also narrowed the buffer’s range to 0% to 3% from 0% to 4%, giving the banks additional capacity to support domestic lending and investment while retaining capital to absorb potential losses. Common Equity Tier 1 ratios average about 13.5% across the six banks, compared with the new supervisory expectation of 11%. The resulting capital cushion is about CAD 74 billion, equivalent to potential risk-weighted asset growth of CAD 673 billion. The regulator said the remaining buffer is sufficient to cover a range of prudential vulnerabilities and will continue monitoring financial system risks and economic developments, adjusting the buffer as conditions evolve.
2026-06-19Office of the Superintendent of Financial Institutions
Canada’s Office of the Superintendent of Financial Institutions lowers Domestic Stability Buffer to 3%
The Office of the Superintendent of Financial Institutions cut the Domestic Stability Buffer for Canada’s six systemically important banks to 3% from 3.5% and narrowed its range to 0% to 3%. The change, effective June 19, 2026, gives banks more capacity for domestic lending and investment while retaining a substantial capital cushion.