OSFI looks to help banks boost lending with capital requirement changes

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OTTAWA - Canada's federal banking regulator is moving to make it easier for banks to loan money to small and medium-sized businesses and for some real estate projects.

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OTTAWA – Canada’s federal banking regulator is moving to make it easier for banks to loan money to small and medium-sized businesses and for some real estate projects.

The Office of the Superintendent of Financial Institutions says the changes to capital requirements will better reflect risks faced by institutions while freeing capacity for them to extend credit and support growth.

It says the proposed changes would give financial institutions more flexibility and reduce their regulatory burden.

The Bay Street Financial District is shown with the Canadian flag in Toronto on Friday, Aug. 5, 2022. THE CANADIAN PRESS/Nathan Denette
The Bay Street Financial District is shown with the Canadian flag in Toronto on Friday, Aug. 5, 2022. THE CANADIAN PRESS/Nathan Denette

OSFI has launched a 90-day public consultation on the proposed changes which would come into effect Nov.1, 2026 or Jan. 1, 2027 for institutions with a financial year ending Oct. 31 or Dec.31, respectively.

The proposed changes come as the regulator also makes changes to the capital requirements for insurance companies and looks to improve the way institutions report climate-related financial risks.

OSFI says it’s dropping certain climate-risk reporting requirements to focus on material exposures and refining industry classifications to focus on high-emitting sectors. It is also clarifying definitions to reduce ambiguity and improve consistency.

This report by The Canadian Press was first published Nov. 20, 2025.

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