The Office of the Superintendent of Financial Institutions (OSFI) lowered the Domestic Stability Buffer (DSB) for Canada’s six largest banks. The regulator reduced the requirement from 3.5% to 3.0%. This change takes effect on June 19, 2026. It represents the first reduction in the buffer since June 2023.
OSFI also narrowed the potential range for the buffer to between 0% and 3%. This adjustment replaces the previous cap of 4%. The move provides major institutions, including The Bank of Nova Scotia, greater flexibility to deploy capital.
The regulator intends for this move to increase lending and encourage investment during a period of structural economic change. Major banks currently maintain capital levels well above the new 11.0% supervisory expectation. This decision signals regulatory confidence in the resilience of the Canadian banking sector.