Bank of Canada Governor Tiff Macklem warned that the recent loosening of capital rules will not, by itself, lift lending activity. He emphasized that banks need a steady flow of credit‑worthy borrowers before any regulatory tweak can translate into higher loan volumes. Analysts had questioned whether the rule change alone could spark a noticeable uptick in credit supply, in the current economic slowdown.

The policy shift follows a broader effort by Canadian regulators to ease balance‑sheet constraints after a period of tightened standards aimed at bolstering system resilience. While the move may improve banks’ capital ratios, Macklem notes that profitability pressures and risk appetite will shape actual loan growth. Investors will watch banks’ quarterly reports for signs of any shift in credit‑extension trends, for major lenders.

For borrowers, the announcement signals that easier capital requirements will not automatically translate into looser underwriting. Lenders are likely to maintain current credit standards until demand rises, meaning businesses seeking financing may still face tight conditions. The central bank’s stance reinforces that regulatory tweaks are only one piece of the broader credit‑creation puzzle across multiple sectors and geographic markets.