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The Office of the Superintendent of Financial Institutions (OSFI) wants to lower the risk weight—a measure used to calculate the amount of capital banks must hold to hedge against the risk of defaults—applied to small-business loans to 75 per cent from 85 per cent. (The Logic)
Talking point: Speaking to reporters, OSFI’s Jacqueline Friedland said the regulator is proposing the change to “support competitiveness while maintaining stability and soundness.” In September, OSFI head Peter Routledge said the regulator was considering making changes to capital requirements in an effort to encourage lending to businesses that need help in the face of U.S. tariffs. The banks’ trade association expressed its support for the change earlier this year, arguing that “small changes in capital requirements can have a significant impact on credit availability and price.” OSFI is inviting feedback on the proposal, which would go into effect as early as Nov. 1, 2026.
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