The Optimistic Regulator: Canada’s Banking System is Strong — But Here’s What Keeps Regulators Up at Night

Recorded on March 5, 2026

Canada’s banking system is often described as one of the strongest in the world — but even strong systems face real risks. Peter Routledge, Superintendent of Financial Institutions, joins In the Money with Amber Kanwar for a rare conversation about the health of Canada’s financial system and what still keeps the country’s top banking regulator up at night.

Routledge discusses the key risks his office is watching closely right now — from rising U.S.-Canada trade tensions to vulnerabilities in Canada’s mortgage market. He explains how regulators think about household debt, refinancing risk, and the resilience of borrowers as higher rates work their way through the system. At the same time, he stresses that Canadian banks are entering this period from a position of strength and have ample capital to absorb shocks, a core reason he believes the system remains resilient.

The conversation also explores emerging risks building outside traditional banking, including the rapid growth of private credit and private equity, areas where regulators are paying closer attention as banks deepen their exposure through financing, partnerships, and fund investments. Routledge also explains how OSFI is adapting supervision for a faster-moving financial world, why regulators are pushing institutions to strengthen resilience before problems emerge, and how capital buffers and stress testing help ensure Canada’s financial institutions can withstand unexpected disruptions.

Routledge also reflects on his tenure leading Canada’s banking watchdog — which has two years remaining — and why he has actually grown more optimistic about the strength of the system during that time. Despite a more uncertain economic backdrop, he explains why he believes Canada’s banks and insurers are better prepared than ever to handle whatever comes next.

Timestamps

01:20 Intro
03:40 How the regulator is thinking about the banking sector
05:50 What is the key to the banks strength & safety?
08:50 Bank fears around NAFTA 2.0
12:30 Risks in the mortgage market
17:00 Defending the stress test
24:30 Are the banks overcapitalized?
27:10 OSFI’s Annual Risk Outlook
28:30 Risks in private equity & private credit
36:00 Increasing competitiveness in the banking sector

43:20 Why did the regulator green light consolidation?
45:30 Peter’s thoughts on board responsibility
48:00 How has Carney informed priorities?
51:00 How Peter has evolved as regulator

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DISCLAIMERS

The information provided in this podcast is for informational purposes only and does not constitute financial, investment, or professional advice.The views expressed by the host and guests are their own and do not necessarily reflect the opinions of any organization or company. The host and guests may maintain positions in any securities discussed on the podcast. Always consult with a qualified financial advisor or professional before making any investment decisions.

In the Money delivers expert stock picks, actionable ideas, and timely money management tips. Hosted by business journalist Amber Kanwar, each episode features interviews with top portfolio managers who suggest ways to achieve good returns. Covering everything from ETFs and Canadian stocks to global investing trends, dividend strategies, and risk management, this show is made for DIY investors, stock market enthusiasts, and anyone looking to sharpen their financial strategy.

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