Financial institution failure

Financial services are critical to everyone.

Every day, Canadians perform hundreds of millions of transactions through buying, selling, borrowing, paying, investing and other forms of financial activity.

A stable financial system is at the foundation of a healthy economy.

Sound regulation and supervision of financial institutions, including banks, trust and loan companies and federal credit unions (FCUs) play an important role in financial stability, but as in any competitive market, boards of directors and management are responsible for business performance, and financial institutions can sometimes fail.

For this reason, Canada has a federal framework that aims to:

  • Protect eligible deposits
  • Maintain the flow of critical financial services
  • Protect our economy
  • Minimize risk to taxpayers

CDIC is Canada’s resolution authority for banks, federally regulated credit unions, trust and loan companies as well as associations governed by the Cooperative Credit Associations Act that take deposits. This means that CDIC takes the lead in handling the failure of these member institutions – from smallest to largest – to protect eligible deposits.

Since its creation by Parliament in 1967, CDIC has handled 43 failures, affecting more than 2 million depositors. No one has lost a single dollar of insured deposits.