On June 18, OSFI announced that the Domestic Stability Buffer (DSB) will remain at 3.5% of total risk-weighted assets.  

This level was announced in June 2023, has been in effect since November 1, 2023, and is subject to change twice a year or as needed – for example, on March 13, 2020, OSFI lowered the buffer from 2.25% to 1% in response to the COVID-19 pandemic. 

Through the DSB, OSFI requires Domestic Systemically Important Banks (D-SIBs) to set aside capital to offset potential shocks during challenging times. OSFI also expects these institutions to hold their total Common Equity Tier 1 (CET1) ratio to at least 11.5% of risk-weighted assets. 

Although the DSB only applies to Canada’s six D-SIBs, it reflects OSFI’s assessment that vulnerabilities remain elevated but stable, while near-term risks continue to be low despite some recent increases. Future mortgage renewals at higher interest rates and high household debt remain a concern while commercial real estate lending and geopolitical conflicts continue to contribute to economic uncertainty.