Trades ensnared by settlement hold-ups at Royal Bank of Canada generated C$3.5 billion ($2.5 billion) of risk-weighted assets (RWAs) as of end-January, marking a massive blow-up for a class of capital charges that normally clock in the hundreds of millions at most.

RWAs for settlement risk – which stem from securities, foreign exchange or commodity transactions whose settlement is delayed by a certain number of days, depending on the settlement method – were up 260% on the previous quarter and