OTTAWA (Reuters) – The amount of capital that Canada’s biggest lenders must hold as a stability buffer will rise to 3.00% from 2.50% of risk-weighted assets on Feb.1 in response to increased economic uncertainty, the country’s financial regulator said on Thursday.
The Office of the Superintendent of Financial Institutions (OSFI) said persistent inflation and rising interest rates along with political tensions had exacerbated vulnerabilities.
“Systemic vulnerabilities remain elevated – with some, namely Canadian household indebtedness and asset imbalances, edging upwards – as well as the results of recent stress tests,” it said in a statement.
An OSFI review had shown that the buffer continued to serve to ensure “both systemic stability and the resiliency of D-SIBs (domestic systemically important banks),” OSFI’s Chief Risk and Strategy Officer Angie Radiskovic said in the statement.
(Reporting by Ismail Shakil in Ottawa)
