(Toronto) The Canadian financial regulator announced Thursday that it has lifted the temporary suspension to increase the dividend and share buybacks it had imposed on banks at the start of the COVID-19 pandemic.
The head of the Office of the Superintendent of Financial Institutions (OSFI), Peter Routledge, explained that “prudent and effective” restrictions put in place to support the resilience of financial institutions are no longer necessary.
Financial institutions are also allowed to increase the salaries of their CEOs.
Routledge says corporate boards must be able to make decisions about payments, and OSFI expects them to act responsibly.
The regulatory group imposed limits on dividends and share buybacks in March 2020, while easing cash reserve requirements for banks, hoping to use the extra capital to lend to businesses and households in order to support the economy.
Since then, government support programs have also helped stimulate the economy, and banks are now dependent on liquidity well above minimum requirements.
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