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…
