OSFI lowers Domestic Stability Buffer to 3.0% so Canada's largest banks can deploy more capital

OTTAWA, ON, June 19, 2026 /CNW/ - Today, the Office of the Superintendent of Financial Institutions (OSFI) announced that it is lowering the Domestic Stability Buffer (DSB) to 3.0% from 3.5% of total risk-weighted assets. This is the first change in the DSB level since June 2023 and takes effect today. In addition, OSFI is lowering the range of the DSB to 0 to 3% from 0 to 4%.

Big Banks Capital CET1 Requirements (CNW Group/Office of the Superintendent of Financial Institutions)

In setting the DSB, OSFI weighs the resilience benefits of additional capital against the financial system's ability to support economic growth and adaptation. These measured adjustments reflect the sustained strength and resilience of Canada's domestic systemically important banks. These institutions have built extraordinary loss-absorption capacity for a range of risks that enable them to continue to lend and take other risks in meeting customer needs.

Canada's six largest banks continue to perform well and maintain resilient capital levels, with Common Equity Tier 1 (CET1) ratios well above the new supervisory expectation of 11.0%, at an average of 13.5% across the sector. This sizable capital cushion equates to roughly $74 billion or, equivalently, an expansion in risk-weighted assets of $673 billion.

OSFI is lowering both the DSB level and the top end of its range to provide Canada's six largest banks with greater flexibility to deploy capital. These adjustments will enable Canada's largest banks to aid the Canadian economy's adaptation to shifting dynamics in technology, trade, and geopolitics with opportunities in segments such as defence and security, critical infrastructure, resources, and artificial intelligence.

More information about OSFI's decision can be found in the Decision Summary Note.

Quote

"By lowering both the level and top end of the range of the Domestic Stability Buffer, OSFI will enable the banking sector to deploy its excess capital in support of Canada's economic adaptation to new opportunities. These decisions are consistent with our risk-based, proactive approach to managing capital buffers for Canada's systemically important banks. We anticipate Canada's largest banks will use this capital release to invest in Canada's economy through this period of structural change." 

- Peter Routledge, Superintendent of Financial Institutions 

Quick facts  

• The DSB applies to Canada's six largest banks, known as domestic systemically important banks (D-SIBs).
• OSFI expects D-SIBs to maintain a total Common Equity Tier 1 (CET1) ratio of at least 11.0% of risk-weighted assets.  All currently exceed 13% with an average of 13.5%.   
• OSFI reviews and sets the DSB level twice a year, in June and December, and can adjust it at any time if conditions warrant.  
• Decisions are based on a wide range of indicators, stress-testing results, and supervisory judgment.

Related links  

• Opening Remarks by Superintendent Peter Routledge
• Domestic Stability Buffer Decision Summary Note 
• Industry Letter

SOURCE Office of the Superintendent of Financial Institutions

OSFI - Media Relations, Email: [email protected], Telephone: [phone]