OTTAWA, ON, June 26, 2025 /CNW/ - Today, the Office of the Superintendent of Financial Institutions (OSFI) announced that it will maintain the Domestic Stability Buffer (DSB) at 3.5%.
The Domestic Stability Buffer applies to Canada's six largest, or systemically important, banks. It requires these banks to set aside capital so that it is available for use during periods of stress.
The decision to hold the DSB at its current level reflects OSFI's judgment that some critical vulnerabilities and risks remain elevated. That said, the uncertainty caused by rising trade disputes has not manifested itself in indicators of financial system stress.
The DSB is a usable capital buffer, intended to be built up during periods of growth and released as risks materialize. Using capital buffers is a sign of a healthy financial system. OSFI will continue to monitor developments in Canada's financial system as well as the broader economic landscape and will adjust as conditions warrant. These conditions could range from large economic shocks to a less severe materialization of risk.
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"While the risks and vulnerabilities remain, Canada's systemically important banks have entered this period of uncertainty from a position of strength thanks to the strong capital buffers they have fortified in recent years. We are prepared to act swiftly to lower the DSB, if necessary, to ensure financial institutions remain a source of strength for the economy."
Peter Routledge, Superintendent of Financial Institutions
Quick facts
- The DSB applies to the total risk weighted assts held by Canada's global systemically important banks (G-SIBs) and domestic systemically important banks (D-SIBs).
- D-SIBs continue to be expected to target a Common Equity Tier 1 ratio of at least 11.5% of total risk-weighted assets. Current CET1 ratios are up 30 basis points to 13.6% on average as of April 30, 2025.
- OSFI reviews and sets the DSB level every June and December but can make changes at other times as circumstances warrant.
- The DSB has a range from 0%-4%
Related links
- Decision summary note
- Industry letter
- OSFI Domestic Stability Buffer Page
- Opening remarks by Superintendent Peter Routledge
- Video – What is the Domestic Stability Buffer
- Infographic – Domestic Stability Buffer – Supporting the Resilience of Canada's Financial System
- Domestic Stability Buffer Design Framework
- Systemically Important Banks
SOURCE Office of the Superintendent of Financial Institutions
OSFI - Media Relations, Email: [email protected], Telephone: 343-550-9373
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