.jpg)
11 hours ago
1
Article content
More than two years after the failure of three banks in the United States, the federal government released a consultation paper that proposes to increase the insurance coverage for bank deposits in Canada.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER / SIGN IN TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
Sign In or Create an Account
or
Article content
While Canada’s financial sector was not affected by those U.S. bank failures in 2023, it was a reminder that large banks could experience runs that could quickly lead to their end, and also highlighted the important role that deposit insurance can play in promoting stability, the Department of Finance said in the paper that it released Tuesday.
Article content
Article content
Article content
Canadian bank deposits are guaranteed by the Canada Deposit Insurance Corp. (CDIC), a Crown corporation established in 1967. The amount customers can get back if a bank shuts down is currently limited to $100,000 per category of deposit (such as savings and chequing accounts and guaranteed investment certificates), per financial institution as long as it is a member firm. All large Canadian banks and many other financial institutions such as credit unions are CDIC insured, though deposit categories such as mutual funds, stocks, bonds or cryptocurrencies are not included.
Article content
By signing up you consent to receive the above newsletter from Postmedia Network Inc.
Article content
The government proposes to increase the insured limit to $150,000.
Article content
“The deposit insurance limit has not been increased since 2005,” the paper said. “Since then there has been a deterioration of the real value of deposit protection such that the adjusted limit today would be approximately $150,000.”
Article content
It also noted that Canadians’ saving patterns and changing demographics have increased the number of deposits that exceed the $100,000 limit, with fewer fully protected depositors.
Article content
“Such an increase to the limit would offset the effect of inflation on the limit and would increase the proportion of fully protected depositors,” it said.
Article content
Ottawa will look to receive feedback from “interested Canadians and stakeholders” on the proposals mentioned in the consultation paper until Sept. 26.
Article content
Article content
English (US)