Canada's banks protected by regulations unlikely to collapse, experts say
The recent collapse of three banks, two American and one Swiss, has countries coming together, in an effort to balance teetering markets, and perceived global instability.
Experts say with Canada's strict regulations and protection measures for bank customers, it is unlikely to happen here.
In recent weeks, back-to-back failures of American money institutions Silicon Valley Bank and Signature Bank, followed by Credit Suisse in Europe, may have some Canadians concerned of a similar situation. Duane Francis, portfolio manager and senior financial advisor with Capital Wealth Partners and Mandeville Private Client Inc. says while nothing is impossible, Canadian policies are designed to prevent a collapse.
"Since this has happened, it started kind of a contagion across the globe so now you're starting to see concerns are all banks going to be painted with the same brush. I don't think it's going to be a big concern for Canadians but it's definitely a concern globally, as no one likes uncertainty," he says. "Canada is very different than the U.S. We have regulations and there is insurance in place. The Canadian Deposit Insurance Corporation was started in 1967 and they created that agency to protect Canadians."
Bank customers are insured up to $100,000 per institution on cash accounts, term deposits, and guaranteed investment certificates. This also applies to other accounts within the institutions like RSPs, TFSAs and education savings plans.
"So you could have up to about $900,000 insured if you have these different accounts," says Francis. "There is also the Canadian Investor Protection Fund, which a firm like ours and dealers, like our member firms, have protection over and above the CDIC, up to $1M of general investments. Plus a registered retirement savings plan, retirement investment fund, those types of investments are also protected up to $1 million ... so you could have up to $3M of protection in case your member firm is insolvent or bankrupt."
Canada's last major banking collapse was in 1923, when The Home Bank of Canada went bust. Its failure, and the estimated 60,000 people who lost their life savings, became a watershed moment for the government, which enacted strict federal policies that remain in place a century later.
"There are no major banks, no major institutions since that time that have failed," says Francis. "And since 2001 to 2023 they are have been 562 institutions in the United States not including SVB, or any other of these banks that have failed. In Canada over the same time period, zero."
Francis advises those who want to add extra protection diversify portfolios, have money in accounts at separate institutions, keep some cash on hand just in case, be sure to monitor bank accounts for activity and, if you have questions or concerns, speak with a professional who can help navigate the financial seas.
CTVNews.ca Top Stories
Asking rent prices up 9.3% across Canada, Ontario sees only decline: report
A new report says the average asking rent for a home in Canada in April was up 9.3 per cent compared with a year ago, while a slight month-over-month increase was also recorded for the first time since January.
What is basic income, and how would it impact me?
Parliamentarians are considering a pair of bills aiming to lift people out of poverty through a basic income program, but some fear these types of systems could result in more taxes for Canadians who are already financially struggling.
'I may have some nightmares:' Man survives being bitten by 2 sharks in Bahamas
A man who was bitten by two sharks in the Bahamas said Thursday he's 'thankful that I'm here' while sharing his story of survival.
Magnitude 4.2 earthquake reported off Vancouver Island's west coast
A 4.2-magnitude earthquake was recorded west of Vancouver Island early Friday morning.
Mexico's president accuses press and volunteer searchers for missing people of 'necrophilia'
The administration of Mexico's president has accused the press and volunteer searchers who look for the bodies of missing people of 'necrophilia,' comments that drew criticism this week.
WATCH Expecting an interest rate cut in June? Don't bet on it after new jobs data
Canada's labour market rebounded in April, adding more than 90,000 jobs, a staggering number of new positions after four consecutive months of little change.
Out-of-control wildfire burning near Fort McMurray
As of 9 a.m. on Friday, the wildfire burning 28 kilometres southwest of the northeastern Alberta city was 25 hectares in size.
Prince William says wife Kate is 'doing well'
Prince William said on Friday his wife Kate was 'doing well' in a rare public comment about the Princess of Wales as she undergoes preventative chemotherapy for cancer.
'Irate male' assaulted Newfoundland officers with block of cheese, police say
Police in Newfoundland say patrol officers were assaulted Thursday by a "very irate male" wielding a block of cheese.