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Peter Routledge thinks Canada’s financial system can handle more failure
Canada's top bank regulator Peter Routledge says the financial system can handle more failure as it eases its risk approach.
Key points
- OSFI cut the domestic stability buffer to 3 per cent from 3.5 per cent in June.
- Routledge said the financial system is tough enough to take a punch and can handle bank failures if they are rare.
- OSFI endorsed the Financial Stability Board's responsible-AI practices on Oct. 15.
Why it matters. The regulator says lower capital buffers give banks more room for lending and investment, while cybersecurity and AI risks remain a major concern for OSFI.
Canada's top bank regulator, Peter Routledge, told The Logic's Kevin Carmichael in Toronto on Monday that his agency may have gone too far guarding against shocks. In June, the Office of the Superintendent of Financial Institutions cut the domestic stability buffer to 3 per cent from 3.5 per cent, giving banks more room to lend and invest. Routledge said the system holds more buffer capital than ever before, and that OSFI endorsed responsible-AI practices on Oct. 15.
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Peter Routledge thinks Canada’s financial system can handle more failure
The post Peter Routledge thinks Canada’s financial system can handle more failure appeared first on The Logic . 0:00 Canada’s top bank regulator said the agency he heads might have gone too far in the past to protect Canada’s financial sector against shocks, potentially stifling innovation in the process. Superintendent of Financial Institutions Peter Routledge told The Logic’s Kevin Carmichael onstage at Toronto’s Arcadia Court Monday that the regulator is upping its risk tolerance to encourage what he described as “creative destruction,” ending a long period at the regulator of strictly prioritizing financial resilience. “The system is tough enough to take a punch,” said Routledge, adding that Canada’s financial sector can handle bank failures if they arise, “provided they’re rare and inexpansive.” Read more from The Logic Summit 2026 Routledge has been reconsidering whether Canada’s approach to preventing financial failures unnecessarily constrains economic growth and competition. In a September speech, he said the regulator would look at easing capital requirements for smaller lenders and making it easier for new players to enter the market, while keeping financial stability its priority. Routledge’s agency, the Office of the Superintendent of Financial Institutions, or OSFI, has already eased one capital requirement for Canada’s largest banks. In June, it lowered the domes.