Federal banking regulator holds domestic stability buffer at 3.5 per cent
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Bank towers are shown from Bay Street in Toronto's financial district, on Wednesday, June 16, 2010. Photo by Adrien Veczan /THE CANADIAN PRESSArticle contentCanada’s federal banking regulator says it is keeping its domestic stability buffer unchanged at 3.5 per cent as it judges major vulnerabilities in the banking system remain elevated but are stable.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe buffer is part of the amount of money Canada’s big banks must keep on hand in case of economic shock. It applies to Canada’s six largest, or systemically important, banks.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentPeter Routledge, who leads the Office of the Superintendent of Financial Institutions, says the financial landscape shows no need to release more capital.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“Where we are right now is a lot better than we had feared we might be, as an economy and as a financial system,” he said on a conference call with media.Article content“If conditions deteriorate, if uncertainty rises and creates economic disruptions or financial market disruptions, we are prepared to lower the 1/8domestic stability buffer3/8.”Article contentLowering the buffer would give banks more room to lend, potentially helping the economy, but Routledge said banks still have notably more capital on hand than needed.Article contentWhile banks are currently required to keep an 11.5 per cent buffer overall, they’re currently averaging 13.6 per cent, making for $60 billion in extra capital, he said.Article content“With strong capital positions, Canada’s 1/8systemically important banks3/8 are not capital constrained and have ample capacity to support households and businesses as economic and financial conditions evolve.”Article contentRoutledge said Canadian household debt relative to income remains high but relatively stable and below historical peaks given softer conditions in the housing market.Article contentOSFI said that Canadian corporate debt growth has moderated but credit quality is vulnerable to trade-related headwinds.Article contentThe buffer is reviewed and set every June and December, but can be changed at other times if needed.Article contentThis report by The Canadian Press was first published Dec. 18, 2025.Article contentTrending Philip Cross: The sad story of Justin Trudeau’s 'youthful idiots' FP Comment Posthaste: Here's where home prices plunged the most in tough year for Canada's housing market News Tax Court overturns CRA decision to deny bitcoin loss writeoff Taxes Welcome to the K-shaped economy: Canadians look back on a 'brutal,' 'great' year in Trump's trade war Economy Trump official signals support for trade deal with Canada, Mexico Economy Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Philip Cross: The sad story of Justin Trudeau’s 'youthful idiots' FP Comment Posthaste: Here's where home prices plunged the most in tough year for Canada's housing market News Tax Court overturns CRA decision to deny bitcoin loss writeoff Taxes Welcome to the K-shaped economy: Canadians look back on a 'brutal,' 'great' year in Trump's trade war Economy Trump official signals support for trade deal with Canada, Mexico Economy