Financial regulator raises stability buffer amid heightened systemic risks

Canada's financial regulator is raising the amount of capital major banks need to have on hand over concerns of high household debt levels and other systemic vulnerabilities.

The adjustment comes as debt levels and delinquencies remain fairly stable while debt service costs are on the rise, OFSI chief risk officer Angie Radiskovic told reporters.

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.