OSFI Open to Innovative Measures to Help Banks Finance Canada’s Nation-Building Efforts
By Naimul Karim, Financial Post – November 25, 2025
OSFI, Canada’s top banking regulator, is open to new ideas. It seeks creative steps that help banks back Canada’s nation-building. OSFI wants banks to support major economic projects. This push follows a recent plan that aimed to free capital so banks could lend more. The previous plan helped real estate and small businesses.
A Call for Continuous Innovation
At Monday’s press event, Peter Routledge, OSFI’s head, stressed that the work continues. He tied each idea tightly to its goal: boosting the financial system for big projects. “We are not done,” he said. “Instead of waiting a whole year, we work regularly. What tests can we run so the system helps shift the economy?” Routledge urged banks and insurers to share their ideas. “I prefer using their thoughts because they know their business best,” he explained.
Adjusting Risk Weights to Unlock Lending Capacity
On November 20, OSFI shared a new plan. The regulator now lowers risk weights on some loans. Lower risk weights mean banks keep less capital per loan. This change helps banks lend more while staying safe. For small and medium business loans, risk weights drop from 85% to 75%. For low-rise residential real estate loans, they fall from 150% to 130%. Loans for projects with a 75% pre-sale rate also get a lower risk weight. OSFI is now inviting feedback in a 90-day public consultation.
Supporting Canada’s Strategic Economic Shift
Routledge tied today’s changes to bigger global pressures. Tariffs from the United States, for instance, push Canada to speed up mine, energy, and infrastructure projects. Banks have built strong capital since the financial crisis. “We built stronger rules after the crisis to improve safety,” Routledge said. “Now, we must adjust the system to fit a new economic climate as carefully as possible.” He pointed to sectors like defense, pipelines, ports, and green energy as new frontiers.
Encouraging Industry Collaboration
Routledge calls for ongoing, close talks with banks and insurers. He asks, “Where in banking is there a strong push from a key industry that could use extra capital relief?” By working together, OSFI and the financial institutions can set up new rules that keep banks safe and support economic growth.
For more details on OSFI’s proposals and to join the consultation process, please visit OSFI’s official website.
Contact:
Naimul Karim
nkarim@postmedia.com
This article originally appeared in the Financial Post.
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