Peter Routledge, Superintendent at the Office of the Superintendent of Financial Institutions (OSFI), gives OSFI Domestic Stability Buffer (DSB) Announcement

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Good morning.

Welcome to our June 2026 rate-setting announcement for the Domestic Stability Buffer, or DSB.

I am speaking to you from Ottawa on land that has long served as a meeting place amongst Indigenous peoples, including the Anishinaabeg Algonquin Nation, the traditional keepers of this land. I am grateful to be present in this territory.

The DSB is a capital buffer that enables Canada's six systemically important banks to absorb losses and continue lending to households and businesses during periods of economic uncertainty.

Today, we are taking prudent and proactive action in support of Canada's economy and long term growth.

We are lowering the Domestic Stability Buffer 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, we are lowering the range of the DSB to 0% to 3% from 0% to 4%.

Taken together, these actions give Canada's largest banks greater flexibility to deploy capital in support of the economy. We anticipate they will use this added capacity responsibly, including by expanding the financial services they provide to Canadian households and businesses, as the economy adapts to shifts in technology, trade and geopolitics.

Canada's six largest banks continue to perform well and maintain resilient capital levels.

Common Equity Tier 1 ratios remain well above the new supervisory expectation of 11.0%, averaging approximately 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.

This means that Canada's largest banks have the capacity to safely expand their domestic risk-taking activities and adapt their business models in response to rising opportunities for domestic investment in areas such as defense, infrastructure, resources, and advanced technologies. These opportunities stem from shifts in trade policy, evolving geopolitical tensions, and the innovations in the financial system driven by digitalization and artificial intelligence.

In addition, OSFI stresses that the remaining capital buffer – with the DSB at 3.0% – is sufficient to absorb the potential costs posed by a range of prudential vulnerabilities.

As with our prior DSB decisions, today's decision reflects a risk-based, proactive approach to managing capital buffers.

In calibrating and adjusting the DSB, OSFI considers both the resilience benefits of additional capital, and the broader impact on the financial system's ability to support economic adjustment and adaptation. On that basis we judge that 3.0% maximum range preserves a substantial buffer while giving banks more room to support responsible lending and investment.

Experience and analysis remind us that resilience gains from capital buffers become progressively smaller as they thicken, while the impact on financial intermediation becomes more pronounced.

We believe the remaining buffer provides substantial resilience to the banking system. Meanwhile, today's capital release provides an extraordinary opportunity for Canada's six largest banks to invest in the immense potential resident in Canada's economy.

In summary, with this release of capital, we anticipate Canada's banks will expand their investment in and support of Canada's economy through an era of structural change and opportunity.

We will continue to monitor financial system vulnerabilities and broader economic developments and stand ready to adjust the DSB as conditions evolve.

Thank you. I would now be pleased to take your questions.