OSFI increases domestic stability buffer for big banks to 2.00 per cent


OTTAWA — The federal banking regulator is increasing the domestic stability buffer for the country’s systemically important banks to 2.00 per cent from 1.75 per cent.

The Office of the Superintendent of Financial Institutions says on balance the systemic vulnerabilities remain elevated while economic conditions continue to be accommodative.

It noted that specific vulnerabilities covered by the buffer continue to include Canadian consumer debt, asset imbalances in the Canadian market and Canadian institutional debt.

Increases to the buffer require the large banks to increase the amount of capital they hold to protect against vulnerabilities.

The federal regulator reviews and sets the domestic stability buffer in June and December. The new buffer is effective as of Oct. 31, 2019.

The domestic systemically important banks are Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, and Toronto-Dominion Bank.



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