Basel floor change boosts Canadian bank capital ratios
The five largest Canadian banks saved a combined C$6.2 billion ($4.8 billion) in regulatory capital charges following revisions to a standardised capital floor on credit risk.
Effective as of the second quarter, the new floor methodology devised by the Office of the Superintendent of Financial Institutions (Osfi) no longer requires banks to compare their modelled credit risk-weighted assets (RWAs) to a standardised measure calculated using Basel I formulae, and make up the difference between
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