TORONTO –
Canada’s banking regulator says it has cleared the way for banks and insurers to raise dividends and resume share buybacks.
Peter Routledge, head of the Office of the Superintendent of Financial Institutions, says the reasons for the ban that was implemented in the early days of the pandemic no longer stand.
Financial institutions are also cleared to increase executive compensation.
Routledge says that boards of directors at the companies should be able to make decisions on the payouts, and that OFSI expects them to act responsibly.
The regulator imposed the restrictions on dividends and buybacks in March 2020 at the same time as it eased requirements for cash stockpiles at the banks, with the expectation that the extra capital be used to lend to businesses and households to keep the economy going.
Since then, government support programs have also helped stimulate the economy, and the banks are now sitting on cash far in excess of the minimum requirements.
This report by The Canadian Press was first published Nov. 4, 2021.
