Bank towers are shown in Toronto's financial district on Wednesday, June 16, 2010. Canada's financial regulator is raising the amount of capital major banks need to have on hand over concerns of high household debt levels and other systemic vulnerabilities.THE CANADIAN PRESS/Adrien Veczan
OTTAWA – Canada’s financial regulator is raising the amount of capital major banks need to have on hand over concerns of high household debt levels and other systemic vulnerabilities.
The Office of the Superintendent of Financial Institutions says the domestic stability buffer will go up by half a percentage point to three per cent as of Feb. 1, 2023.
The regulator also increased the possible range of future adjustments to between zero and four per cent, rather than the previous top end of 2.5 per cent.
OFSI chief risk officer Angie Radiskovic says in a statement that the increases will help increase the stability of major banks and public confidence in the financial system.
The regulator says the increase in the buffer reflect its assessment that systemic vulnerabilities remain elevated while some, such as high Canadian debt levels and asset imbalances, are on the rise.
The stability buffer, which applies to domestic systemically important banks, was launched in 2018 and is set twice a year, but can be changed at other times if needed.
This report by The Canadian Press was first published Dec. 8, 2022.
