TORONTO (Reuters) - Canada's top banking supervisor, Superintendent of Financial Institutions Jule Dickson, said on Wednesday the nation's top lenders should continue to take a conservative approach to capital levels before contemplating any share buybacks.
Dickson said Canada's big banks have long been required to get approval from her office, OSFI, before a share buyback, and she has continued to urge them to keep in mind that capital levels may be changing under global regulatory reform.
"I think that, in the environment in which we are living right now, institutions are aware that capital requirements are being discussed internationally and there are going to be some changes," Dickson told reporters in response to a question about whether share buybacks were on the table at the banks.
"As well, the environment is still a bit uncertain and we all know that loan losses lag the economy. So these are all things we've put in front of institutions and that suggests continued conservatism in that regard," Dickson said.
Dickson spoke to reporters after giving a speech to capital market players in Toronto.
Canada's big five banks are among the best capitalized in the world and built capital levels through the financial crisis by issuing shares or debt earlier this year.
With the crisis easing, speculation has risen that banks may soon increase their dividends, repurchase shares or deploy capital through acquisitions in a bid to put that capital to work or return it to shareholders.
Dickson also told reporters that Canadian banks were in a very solid position as global regulators discussed amending capital or leverage rules, since they entered the crisis with solid balance sheets and a cautious approach to capital levels.
None of the five big banks -- Royal Bank of Canada
(Reporting by Andrea Hopkins)
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