The Globe and Mail reports in its Thursday edition that the banking regulator is working to change the way it treats some business loans in an effort to make it more appealing for banks to lend to companies that are key to Ottawa's plans to reshape the country's economy. The Globe's James Bradshaw writes that the head of the Office of the Superintendent of Financial Institutions (OSFI), Peter Routledge, said Wednesday that the regulator is consulting with banks and life insurers "to help them help the country," at a Toronto banking conference. The forthcoming changes are intended to "rebalance" a highly technical set of rules by which the regulator assigns different levels of risk -- known as "risk weightings" -- to different types of bank loans. Those weightings help determine how much capital a bank has to hold in reserve against its loan portfolio, which in turn shapes decisions about who gets loans and how much banks lend. This fall, OSFI plans to release documents outlining "significant adjustments" to relative risk weightings for bank loan portfolios. U.S. tariff policy is already harming businesses in hard-hit industries such as aluminum, steel and carmaking, and has created widespread uncertainty for businesses.
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