Public awareness study
Our research shows that informing Canadians about CDIC deposit protection helps keep the financial system safe and secure, and reduces the risk of bank runs.
A bank run occurs when a large number of customers of a bank or another financial institution withdraw their deposits at once. Although bank runs are rare, they can have a significant impact on the economy and tend to reduce confidence in the financial system.
The probability that individuals will run a bank or other financial institution increases by 40 percentage points if they are not aware that there is deposit protection.
The damaging effects of a bank run can happen quickly:
Findings: awareness reduces risk
Our research shows that depositors who are made aware of government-backed deposit protection (such as that provided by CDIC) quickly and easily decide not to run a bank or other financial institution. The optimal level of awareness to reduce the risk of bank runs is between 60% and 65% of Canadians.
That’s why CDIC is working hard to ensure more Canadians know about deposit protection through its public awareness program.