On a call with media on the morning of June 20, Routledge said OSFI’s latest move buys more insurance for stability at an “opportune time” and the regulator won’t hesitate to raise the buffer again — or lower it — if circumstances warrant.
Routledge noted that OSFI’s decision to increase the capital buffer came on the heels of Canada’s largest banks reporting strong enough earnings for most to increase dividends paid to shareholders. One that didn’t increase the dividend still pursued a share buyback, he said.Article content However, he said the regulator will continue to watch a variety of performance indicators for signs of trouble, including formations of bad loans, delinquencies, economic performance, and unemployment, and will continue discussions with financial institutions to address risks OSFI has already articulated. These include the housing market, liquidity and funding and commercial real estate.