Canada cuts big bank capital requirements to boost lending

Canada's banking regulator, OSFI, has reduced the domestic stability buffer from 3.5% to 3% for major banks including BMO, RBC, TD, Scotiabank, CIBC, and National Bank. This move frees up 74 billion Canadian dollars in capital, which is expected to fuel investment in infrastructure, defense, and AI sectors. The regulator aims to encourage banks to take on more risk and deploy capital as the economy requires stimulus, with tier 1 capital ratios dropping to 11%.