Financial regulator raises stability buffer amid higher debt levels, systemic risks

The Office of the Superintendent of Financial Institutions said Thursday the domestic stability buffer will go up by half a percentage point to three per cent as of Feb. 1, 2023. It also increased the possible range of future adjustments to between zero and four per cent, rather than the previous top end of 2.5 per cent.

By raising the amount of money banks need to set aside, it gives the regulator more room to lower the capital requirements when a downturn hits to give banks access to potentially needed extra funds. Radiskovic said the buffer increases will boost the stability of major banks and public confidence in the financial system.

Translation: We need to make sure banks have enough money on hand, so when people go to remove the money from their accounts to stop us from stealing it, we do not have riots.

By raising the amount of money banks need to set aside, it gives the regulator more room to lower the capital requirements when a downturn hits to give banks access to potentially needed extra funds.The adjust’s come as the economic risk profile has changed considerably this year

Please translate this to Punjabi so most Canadians understand .

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