Prime lending rates at major Canadian banks rise across the board after Bank of Canada’s latest overhaul Rate of interest Rise Wednesday.
RBC, TD Bank, BMO, CIBC, Scotiabank and National Bank all said as of Wednesday they had closed their prime rates 6.45 percent from the previous 5.95 percent.
moves mirror 50-basis-point interest rate hike From bank of canada On Wednesday, its policy rate was brought down to 4.25 per cent.
Interest rates have increased in 2022. Here’s How Much You’re Overpaying To Borrow
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The central bank’s key interest rate has jumped four percentage points during seven increases in 2022, one of the tightest cycles in its history.
The Bank of Canada policy rate sets lending rates for major banking institutions and generally makes borrowing more expensive for Canadians with certain types of debt.
Commercial banks set prime lending rates as benchmarks for loans such as mortgage products offered to homeowners.
Financial regulator seeks to safeguard banking stability, public confidence
Canada’s financial regulator is meanwhile boosting the amount of capital at major banks to address concerns about high household debt levels and other systemic weaknesses.
The Office of the Superintendent of Financial Institutions said Thursday that the domestic stability buffer will increase by half a percentage point to three percent by February 1, 2023.
The regulator widened the possible range of future adjustments to between zero and four per cent instead of the previous top end of 2.5 per cent.
OFSI chief risk officer Angie Radiskovic said in a statement that the hike would help increase the stability of major banks and public confidence in the financial system.
The regulator says the increase in the buffer reflects its assessment that systemic vulnerabilities have increased, while some, such as high Canadian debt levels and asset imbalances, are increasing.
The stability buffer, which applies to domestic systemically important banks, was launched in 2018 and is set twice a year, but can be changed at other times if necessary.
With files from The Canadian Press
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