OSFI cuts buffer to free up banks' capital, says ball is in their court - The Logic

OSFI trimmed Canada’s domestic stability buffer to 3% from 3.5%, marking the first change since June 2023. The buffer’s range was narrowed to 0-3% from 0-4%, expanding the room banks have to hold excess capital above minimum requirements. Superintendent Peter Routledge told The Logic that the move lifts the extra capital above the top end of requirements to about $74 billion from $45 billion. He stressed the decision is not a mandate to lend more, but to remove capital rules as a potential source of unproductive risk aversion. OSFI maintains the economy’s resilience while adjusting rules to balance prudence with lending flexibility.