OSFI’s Domestic Stability Buffer level remains at 1%

OSFI announced that the Domestic Stability Buffer (DSB) will remain at 1.00% of total risk-weighted assets, unchanged from the level set on March 13, 2020 as part of OSFI’s response to COVID-19.

This decision reflects OSFI’s assessment that the current DSB level remains effective in supporting the resilience of the Canadian banking system and the overall economy. The DSB requires Canada’s six largest banks to set aside a portion of their capital during good times so they can draw down on that reserve in times of economic stress.

OSFI reviews and sets the level of the Domestic Stability Buffer in a letter to industry on a semi-annual basis (June and December), based on its ongoing monitoring of federally regulated financial institutions as well as system-wide and sectoral developments. Decisions on the calibration of the buffer are based on OSFI supervisory judgement, informed by its monitoring and analytical work on a range of vulnerabilities, and are made in consultation with OSFI’s federal financial regulatory partners.

Visit this webpage to see the current level of the Domestic Stability Buffer on the OSFI website.

For more information please see: Domestic Stability Buffer Backgrounder.