Canada’s Big Banks See No Change to Regulatory Capital Requirement Despite Risks

OTTAWA—The resilience Canada’s economy has shown in the face of trade uncertainty will mean the country’s biggest banks must continue to hold elevated capital buffers, though if the cracks in the banking system widen the industry’s regulator has signaled it is prepared to lower the shield lenders hold against risks.

Canada’s Office of the Superintendent of Financial Institutions said Thursday it views systemic vulnerabilities in the financial system to be stable, and in some cases below past highs. As a result, it said it would maintain the domestic-stability buffer—the store of capital that banks must have on hand to be able to absorb losses and continue lending during times of stress—at 3.5% of risk-weighted assets.