“Canada's banks have ample capacity to help fund the country's adjustment in this new era,” says Peter Routledge, head of the Office of the Superintendent of Financial Institutions. Photo by Cole Burston/Bloomberg

Canada’s federal banking regulator is considering loosening lending rules for the country’s largest banks to encourage business loans, with one scenario applying to money loaned for public-private infrastructure development.

Peter Routledge, head of the Office of the Superintendent of Financial Institutions, said in a speech Wednesday that OSFI is looking at changing the capital treatment of certain types of business loans because Canada’s banks have built up substantial capital cushions. At the same time, encouraging business lending by banks could shore up the economy amid

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