The Bank of Canada said the country's six largest banks remain resilient even under a stress scenario where oil stays at $100/barrel for three years. Strong profitability, healthy capital buffers, and higher loan-loss reserves suggest the banking system can withstand a severe downturn. However, the central bank highlighted three growing risks: heavy market concentration in AI-related tech stocks, rising hedge fund leverage in government debt and funding markets, and the possibility that a geopolitical shock triggers a recession and higher unemployment. It also noted that a sharp selloff in AI stocks could have an outsized impact on broader equity markets. My take: the headline is actually reassuring for Canadian banks. The more interesting part is that the Bank of Canada is increasingly worried about market structure rather than bank balance sheets. AI stock concentration and hedge fund leverage are becoming systemic risks, meaning the next financial shock may come from crowded positioning and liquidity stress rather than traditional banking problems.