OTTAWA — The federal banking regulator says Canada’s largest banks will be required by April 30 to increase the amount of capital they hold to protect against vulnerabilities.
The Office of the Superintendent of Financial Institutions says the domestic stability buffer for the country’s systemically important banks will rise to 2.25 per cent of total risk-weighted assets from 2.0 per cent.
It says the increase is necessary because key risks to the banking system remain elevated and in some cases are showing signs of increasing.
Those vulnerabilities include high levels of household and institutional indebtedness as well as global trade tensions.
The federal regulator reviews and sets the domestic stability buffer in December and June. The new buffer is effective as of April 30, 2020.
The domestic systemically important banks are Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, and Toronto-Dominion Bank.
This report by The Canadian Press was first published Dec. 10, 2019.
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The Canadian Press