Canada’s big banks have enough reserves to weather vulnerabilities, OSFI says

The federal banking regulator is keeping its domestic stability buffer on hold at 3.5 per cent.

The buffer is a measure of the amount of capital the country’s major banks need to have on hand to cover potential losses.

OSFI says it’s keeping the rate at its current level because it says Canada’s major banks have reached a level of reserve capital that is sufficient to absorb losses if current vulnerabilities materialize into actual losses.

The decision by the regulator follows a move in June to raise it by half a percentage point.

The domestic stability buffer applies to Canada’s six largest banks, known as domestic systemically important banks.

It is reviewed and set every June and December, but can be changed at other times if needed.

3:40 Bank of Canada holds key interest rate steady at 5%