Tiff Macklem, the Governor of the Bank of Canada, is pouring cold water on the idea that tweaking bank capital rules will somehow unlock a wave of new lending. His message is straightforward: loosening capital requirements in isolation will not increase economic activity.
Why capital rules aren’t the bottleneck
Canadian banks are not exactly starving for capital. The country’s major lenders have been running with an average Common Equity Tier 1 capital ratio of around 12% in recent years. That’s well above regulatory minimums and among the healthiest buffers in the developed world.
Canada’s Office of the Superintendent of Financial Institutions, known as OSFI, revised its Capital Adequacy Requirements guideline on September 11, 2025, with changes taking effect November 1, 2025. But the regulator has been careful to frame these updates as calibrated adjustments to Basel III standards, not a broad relaxation of rules.
The non-bank elephant in the room
