Canada's Office of the Superintendent of Financial Institutions announced in its June 2026 Domestic Stability Buffer rate-setting update that it is lowering the buffer for Canada's six systemically important banks to 3.0% from 3.5% of total risk-weighted assets, effective immediately. It also reduced the DSB range to 0% to 3% from 0% to 4%. The move is intended to give the country's largest banks more flexibility to deploy capital while continuing to absorb losses and support lending during economic uncertainty. OSFI said this is the first change in the DSB level since June 2023. It said the six largest banks remain well capitalized, with Common Equity Tier 1 ratios averaging about 13.5%, above the new supervisory expectation of 11.0%. That excess capital amounts to roughly CAD 74 billion, which OSFI said is equivalent to an expansion in risk-weighted assets of CAD 673 billion. The authority said the remaining 3.0% buffer is sufficient to absorb a range of prudential vulnerabilities and that the recalibration reflects a balance between resilience benefits from thicker capital buffers and the effect of those buffers on financial intermediation. OSFI said it will continue to monitor financial system vulnerabilities and broader economic developments and stands ready to adjust the DSB as conditions evolve.
Office of the Superintendent of Financial Institutions2026-06-19
Canada's Office of the Superintendent of Financial Institutions cuts the Domestic Stability Buffer to 3.0% and lowers its range to 0% to 3%
Canada's Office of the Superintendent of Financial Institutions lowered the Domestic Stability Buffer for the country's six systemically important banks to 3.0% from 3.5% and cut the range to 0% to 3% from 0% to 4%, effective immediately. OSFI said the banks remain well above the new 11.0% supervisory expectation, with average Common Equity Tier 1 ratios of about 13.5%. It will continue monitoring conditions and may adjust the buffer again if needed.