The Office of the Superintendent of Financial Institutions lowered the Domestic Stability Buffer for Canada’s six systemically important banks to 3% from 3.5% of total risk-weighted assets, effective June 19, 2026. It also narrowed the buffer’s range to 0% to 3% from 0% to 4%, giving the banks additional capacity to support domestic lending and investment while retaining capital to absorb potential losses. Common Equity Tier 1 ratios average about 13.5% across the six banks, compared with the new supervisory expectation of 11%. The resulting capital cushion is about CAD 74 billion, equivalent to potential risk-weighted asset growth of CAD 673 billion. The regulator said the remaining buffer is sufficient to cover a range of prudential vulnerabilities and will continue monitoring financial system risks and economic developments, adjusting the buffer as conditions evolve.
Canada’s Office of the Superintendent of Financial Institutions lowers Domestic Stability Buffer to 3%
The Office of the Superintendent of Financial Institutions cut the Domestic Stability Buffer for Canada’s six systemically important banks to 3% from 3.5% and narrowed its range to 0% to 3%. The change, effective June 19, 2026, gives banks more capacity for domestic lending and investment while retaining a substantial capital cushion.