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Company News

Canada raises capital requirement for banks

Dec 10 (Reuters) - Canada’s banking regulator on Tuesday raised the minimum capital requirement for ‘systemically important’ banks by 25 basis points to 2.25%.

The change in domestic stability buffer indicates that Canadian banks are still vulnerable to factors including asset imbalances, along with global vulnerabilities related to ongoing trade tensions, the Office of the Superintendent of Financial Institutions said. (bit.ly/2E4qQBK)

The factors could increase the chance of a spillover of external risks into the Canadian financial system, the regulator said.

Systemically important companies are those whose failure can pose a threat to the global financial system.

The rule will be effective April 30 and will be applicable to banks such as Bank of Montreal, Bank of Nova Scotia , Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank. (Reporting by Abhishek Manikandan in Bengaluru; Editing by Maju Samuel)

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