OSFI maintains Domestic Stability Buffer at 3.5% - December 2024

Today, the Office of the Superintendent of Financial Institutions (OSFI) announced that it will maintain the Domestic Stability Buffer (DSB) at 3.5%. This level was first announced in June 2023 and has been in effect since November 1, 2023.

The decision to hold the DSB at its current level reflects OSFI’s assessment that vulnerabilities and risks facing Canada’s financial system remain generally stable and systemically important banks have maintained an adequate level of capital to address emerging risks.

OSFI requires Canada’s six systemically important banks to set aside a capital buffer so that it can be used to absorb losses due to unexpected shocks. The DSB enables these banks to continue lending to households and businesses during periods of financial stress.

While the DSB is an important tool, OSFI expects banks to remain vigilant and exercise sound judgement in their capital management to reflect today’s risk environment.

We continue to monitor the environment closely and we will proactively make further adjustments to the DSB as conditions warrant.

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

Quote

Our decision to hold the DSB at its current level reflects the resilience of systemically important banks to absorb losses from unanticipated downside shocks and maintain the critical services they provide to Canadians. Canada’s global and domestic systemically important banks must remain vigilant and continue to exercise judgment in capital management.