On: Deposit insurance maximization as a service

[ceejayoz]

> Section 271 of the Financial Institutions Act provides that the Provincial Government may provide financial support to the CUDIC Fund if the CUDIC Fund is impaired (see the CUDIC Fund Target Policy for further details about the CUDIC Fund).

[JumpCrisscross → ceejayoz]

> the Provincial Government may provide financial support to the CUDIC Fund

Know nothing about Canadian law. But that doesn't sound like an obligation.

[acover → JumpCrisscross]

The federal deposit insurance in Canada is the same (cdic). The relevant legislation explicitly says the government has no obligation to bail out the insurance fund.

Practically the fund doesn't have sufficient funds to bail out a big bank failure - let alone multiple - and everyone expects a government bailout.

[rkagerer → acover]

The Federal government can rely on printed money to cover Big Five bank failures.

In BC, how would the government fund a bailout if several Credit Unions collapsed at the same time?

[acover → rkagerer]

Where there is a will, there's a way. The us federal reserve bought corporate bonds during the covid crisis.

Can you imagine the fallout of a bank run on all credit unions? The federal government would find a way to prevent that.