Dec 10, 2021
OSFI leaves rainy day capital buffer unchanged
By Noah Zivitz
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The Office of the Superintendent of Financial Institutions (OSFI) is leaving the domestic stability buffer for systemically important banks unchanged.
OSFI announced in a release Friday morning that the buffer, which serves as a rainy day fund for Canada's banks, will stay at 2.50 per cent of risk-weighted assets.
The buffer was slashed to one per cent in March 2020 in a move that OSFI said at the time would free up $300 billion in lending capacity. It was subsequently raised to 2.50 per cent in October.
OSFI said its status quo decision reflects an "assessment that systemic vulnerabilities such as household indebtedness and housing-related asset imbalances remain elevated. At the same time, near-term risks are moderate and stable on balance."
