Does CDIC have sufficient resource to cover all depositors ... in the worst case scenario ...?cmoibenlepro wrote: ↑ But deposits and interest are insured by CDIC
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- LOL808
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In addition to what @cmoibenlepro said, consider that if CDIC's insurance pool became exhausted it would likely mean that Canada's financial system is in such deep
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- LOL808
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Is that how the CDIC law works? Is the federal govt obligated under the law to make whole every depositors?cmoibenlepro wrote: ↑ It's the federal government. Worst case scenario they can print money to cover the debt.
But before that the failing small bank would be taken over by a competitor.
Does anyone know how "bank bail-in" work?
- bylo
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Ottawa isn't obligated by legislation to bail out a bank. But if a big-5 bank is in trouble, or if several smaller banks are in trouble, the federal government "will have no alternative but to step in and bail them out by any and all means necessary." If they don't the consequences to our economy could be a lot worse than just the bank failure(s).
Some possible options:
1. Extend loans to CDIC and/or the banks so they can pay depositors.
2. Use "moral suasion" to get other banks to support, take over, buy out, etc. failing banks.
3. Print money to pay depositors once CDIC funds are exhausted.
4. Raise taxes.
All of these options have costs. For instance printing money is easy but could flame inflation. Raising taxes could result in voter backlash, etc. But these, especially 3. and 4. are desperate measures taken at times of crisis. I suspect that if we ever get to that point getting back our deposits would be the least of our worries.
This is doomsday stuff like worrying about what would happen in the event of full scale nuclear war, an alien invasion (or a pandemic virus that infects millions and kills 1,000s! ) Even if you had your cash it probably wouldn't be of much value. In those sorts of situations, water, food, ammo, medicine, gasoline, cigarettes, gold, etc. would become the currency of the realm. So relax...
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- 905P4N6
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was there ever a point where clients paid the banks to hold onto their money? kinda like my investment advisor who values my portfolio ever quarter and skims off a few percentage to pay himself?
- bylo
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Yes, in Europe, Japan and elsewhere. Perhaps soon even the US.
See e.g. [or better still ask Dr Google] Understanding the chatter around negative interest rates
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- Shawguy [OP]
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I would add number 1 Water, then number 2 Food, etc. , ... , then number 296 toilet paper. Let's get real here, how valuable is toilet paper for survival ?bylo wrote: ↑ In addition to what @cmoibenlepro said, consider that if CDIC's insurance pool became exhausted it would likely mean that Canada's financial system is in such deepshitdoodoo -- on a scale similar to what COVID-19 may do to the economy in general -- thatOttawa will have no alternative but to step in and bail them out by any and all means necessary. If that happens, especially if Ottawa is unsuccessful, I'd be worried about more important things like food, shelter, safety and even the supply of toilet paper
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- akaManny
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Yeah, I understood your sarcasm. I was trying to make 2 separate points - the first is that water should be included, and the second, is that the run on toilet paper is unbelievable. Sorry, it didn't come across the way I intended.
- choclover
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Try googling Cyprus.LOL808 wrote: ↑ Is that how the CDIC law works? Is the federal govt obligated under the law to make whole every depositors?
Does anyone know how "bank bail-in" work?
- 905P4N6
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What is Tangerine Savings paying for funds deposited today! Is there any limited-time promo going on? or just the posted 0.4%?
- andrew4321
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Excellent... I got my answer in the "Insights" tab ...andrew4321 wrote: ↑ It is different for each client. Check your account.
Earn more interest with your special savings rate until May 31, 2020
You’re earning 2.50%* interest on new deposits to your Tangerine Savings Account(s), Tax-Free Savings Account(s), RSP Savings Account(s) and US$ Savings Account(s) until May 31, 2020. Why not move money to your Account(s), or open a new Account, to make the most of your special rate?
- blackCold
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I have a TFSA with Achieva, I am thinking to cash it out since Achieva is not CDIC insured. Do you think dgcm is as reliable as CDIC ?
With all the crazy situation going on I won't be surprised if situation goes bad for another 3 months that some small players like achieva shut down..
With all the crazy situation going on I won't be surprised if situation goes bad for another 3 months that some small players like achieva shut down..
- Shawguy [OP]
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Cambrian credit union which owns Achieva has over 64,000 members, and 3.8 billion in assets. 17th largest CU as of Sept 2019.blackCold wrote: ↑ I have a TFSA with Achieva, I am thinking to cash it out since Achieva is not CDIC insured. Do you think dgcm is as reliable as CDIC ?
With all the crazy situation going on I won't be surprised if situation goes bad for another 3 months that some small players like achieva shut down..
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- Sauerkraut
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Implicity is now 2%, down 10 BPS.
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Peoples Trust is now up to 2%.
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