To ensure we are prepared for any banking failures, CDIC plans for the resolution of all its member institutions, from small to large.
- Monitoring risks and emerging issues that could affect member institutions and CDIC
- Planning to ensure eligible deposits are protected in the event of a failure of financial institutions of any size
- Requiring member institutions to maintain data standards that would ensure timely reimbursement of deposits in the event of failure
- Working with our domestic and foreign counterparts on ways to resolve the largest banks which operate internationally
- Helping develop new policies to improve Canada’s resolution framework
In 2013, Canada’s six largest banks were designated as Domestic Systemically Important Banks (D-SIBs). The failure of any one of these banks, with the potential loss of financial services, even for a short period of time, could have a serious impact on Canada’s economy.
These D-SIBs offer a wide range of financial services, including deposit taking, provision of credit and wealth management, as well as critical payment, clearing and settlement activities.
This is why D-SIBs must have resolution plans, which describe how they could be resolved in an orderly manner, while ensuring the continuity of critical financial services. CDIC’s role is to ensure these plans are realistic and meet the objectives of resolution. We must also be ready and capable to implement the plan.
Consistent with the FSB Key Attributes, the objectives of these resolution plans are to:
- Protect eligible deposits
- Maintain the flow of critical financial services
- Protect our economy
- Minimize risk to taxpayers
CDIC is working with D-SIBs to ensure these plans are credible, so that Canadians can have confidence in the stability of the financial system.
CDIC’s vision is to earn the trust of Canadians as a global leader in deposit insurance and resolution.
To this end, CDIC meets regularly with its member institutions and provides guidance. Canadian and foreign regulators and other stakeholders also share information and perspectives on resolution. CDIC also works closely with its foreign counterparts via the International Association of Deposit Insurers by contributing to the development of best practices.