Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeFinanceBankingRegulator cuts big banks' capital buffer for the first time in three yearsLowering the domestic stability buffer will encourage more lending, says OSFI You can save this article by registering for free here. Or sign-in if you have an account.Canada's banking watchdog is lowering the capital buffer to encourage lending. Photo by PETER J. THOMPSON/PostmediaCanada’s top banking regulator on Friday reduced the amount of money the big banks must keep aside to absorb unexpected financial shocks for the first time in three years to three per cent.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe Office of the Superintendent of Financial Institutions (OSFI) is also lowering the range of the domestic stability buffer (DSB) by one percentage point to zero per cent to three per cent.“By lowering both the level and top end of the range of the domestic stability buffer, OSFI will enable the banking sector to deploy its excess capital in support of Canada’s economic adaptation to new opportunities,” OSFI superintendent Peter Routledge said in the statement on Friday.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againOSFI requires the Big Six lenders to maintain a capital buffer so that they can continue lending to households and businesses during periods of financial stress. The DSB is measured as a percentage of the banks’ risk-weighted assets, such as mortgages or credit card loans.Earlier this month, C.D. Howe’s Institute’s Domestic Stability Buffer Council recommended OSFI maintain the DSB. It said the current economic situation is worsening due to high energy prices and the ongoing trade uncertainty, but there isn’t enough evidence to suggest conditions have deteriorated enough to justify reducing the buffer.The last time OSFI reviewed the DSB in December, Routledge said the big banks have a higher-than-required cushion, which gives them “ample capacity to continue to grow and profit from their growth,” referring to the closely watched common equity Tier 1 (CET1) capital requirements, which compare the bank’s capital to its assets. The DSB, introduced in 2018, is a component of the CET1 ratio.Canadian banks must now keep their CET1 ratio, including the DSB, above 11 per cent and the Big Six’s average is comfortably above that. Get the latest from Naimul Karim straight to your inbox Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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