Canada’s banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), lowered the Domestic Stability Buffer for the country’s six largest banks. This group includes the Bank of Nova Scotia. The capital reserve requirement dropped to 3.0% of total risk-weighted assets. This figure was previously set at 3.5%. This marks the first reduction since June 2023.
The policy change frees approximately C$74 billion in capital across the six major banks. OSFI stated the move enables banks to support economic adaptation. Funds can now be deployed into infrastructure, defense, and technology sectors.