HomeMortgage"We don't see vulnerabilities worsening," OSFI says as it leaves capital buffer...

“We don’t see vulnerabilities worsening,” OSFI says as it leaves capital buffer for big banks unchanged

Canada’s banking regulator today announced no change to the amount of capital banks must keep on hand to cover potential future losses.

As part of its semi-annual review, the Office of the Superintendent of Financial Institutions (OSFI) left the Domestic Stability Buffer (DSB) at its current rate of 3.5%, which has been in effect since November 1.

Launched in 2018, the DSB serves as a “rainy day fund” that Canada’s big six banks are expected to keep on hand in addition to the minimum capital requirements known as the common equity tier 1 (CET1) ratio. The CET1 ratio remains at 11.5% of risk-weighted assets, although all of the country’s big banks have reported CET1 ratios in excess of 12%.

In making its decision, OSFI superintendent Peter Routledge said the country’s big banks “have each reached a level of reserve capital that is…

Read more at www.canadianmortgagetrends.com

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