The Globe and Mail reports in its Saturday edition that Canada's banking regulator has reduced the size of the capital cushion the country's biggest banks must hold, freeing up billions of dollars to boost lending as Ottawa looks to attract greater private financing for defence and infrastructure. The Globe's Stefanie Marotta writes that the Office of the Superintendent of Financial Institutions, or OSFI, said Friday it lowered its required capital levels to provide banks with greater capacity for lending. In recent years, analysts, bankers and other industry watchers have advocated for loosening capital requirements. In December, 2022, OSFI started ratcheting up capital requirements as a buffer against a potential economic downturn, but the country's biggest banks -- which have posted strong earnings and withstood the threat of loan losses and high inflation in the past few years -- were asking for more flexibility to lend. The banks are now holding on to $74-billion in excess capital. Toronto-Dominion Bank analyst Mario Mendonca said the decision was a surprise, given that OSFI's previous announcements indicated that the buffer would be lowered if economic risks escalated, not as a capital management tool.