GICs Vs Canadian Bank Stocks | Page 2 | GIC discussions | Discussion forum

mordko said
I might not be a fan of Freeland (to put it mildly) but we cannot seriously draw parallels between Canada’s government and Chinese communist dictatorship which does nothing except lie and oppress.

One of the problems with our government is that it has ignored the threat from China and abrogated responsibility to protect Canadian citizens while benefiting electorally from Beijing’s machinations.  

We also cannot ignore the fact that Canada would've subjugated its responsibility for human rights and governance around that to the U.S. because of a bilateral treaty it had with the U.S. around U.S. Office of Foreign Assets Control sanctions in fighting aggressively to deport Meng Wangzhou. It was only China that protected those rights (albeit doing so by infringing the rights of two others). And two Canadian citizens had to spend years in a Chinese prison as political pawns because of the Canadian government not telling the U.S. to go stuff themselves (which they could've done) by threatening to tear up the treaty if they did not engage constructively.

That said, I agree with your second paragraph, too. 🙂

Cheers,
Doug

Loonie said

I'm inclined, in general, to agree. If it weren't intended to have an impact, why would they change the requirement?
There may be disagreement, however, about what the impact would be precisely.  

I'm confused...OSFI has raised, or lowered, the capital buffer by 50 bps? savemoresaveoften said lowered, but that would be a net positive to the bank (i.e., reduced capital being required to be held). If that is the case, this may have been a regulatory 'gift' to the Big Five banks, owing to reduced lending activity with higher interest rates and significant pressure on margins that would, in turn, make it more challenging to continue growing their dividends or buying back shares. OSFI may have attached conditions on this, such as that it be used to help borrowers by being able to offer below mortgage renewal rates to mortgages coming up for renewal.

Cheers,
Doug

Doug said

I'm confused...OSFI has raised, or lowered, the capital buffer by 50 bps? savemoresaveoften said lowered, but that would be a net positive to the bank (i.e., reduced capital being required to be held). If that is the case, this may have been a regulatory 'gift' to the Big Five banks, owing to reduced lending activity with higher interest rates and significant pressure on margins that would, in turn, make it more challenging to continue growing their dividends or buying back shares. OSFI may have attached conditions on this, such as that it be used to help borrowers by being able to offer below mortgage renewal rates to mortgages coming up for renewal.

Cheers,
Doug  

Doug said

I'm confused...OSFI has raised, or lowered, the capital buffer by 50 bps? savemoresaveoften said lowered, but that would be a net positive to the bank (i.e., reduced capital being required to be held). If that is the case, this may have been a regulatory 'gift' to the Big Five banks, owing to reduced lending activity with higher interest rates and significant pressure on margins that would, in turn, make it more challenging to continue growing their dividends or buying back shares. OSFI may have attached conditions on this, such as that it be used to help borrowers by being able to offer below mortgage renewal rates to mortgages coming up for renewal.

Cheers,
Doug  

Regulator sets the min capital requirement, they don’t set the buffer. Individual banks decide how big a buffer they want to run above the min. requirement.
OSFI raises min. capital requirement by 50bps, effectively trimming the buffer by 50bps. If a bank chooses to maintain similar buffer as before, they will scale back their risk weighted asset accordingly.