As Canada’s resolution authority for its member institutions, including the six largest banks designated by the Superintendent as Domestic Systemically Important Banks (D-SIBs), CDIC ensures that there is a plan in place to deal with their failure. These plans are called resolution plans.
The failure of any one of Canada’s D-SIBs could have a serious impact on Canada’s economy. These D-SIBs offer a wide range of financial services, including deposit taking and the provision of credit, as well as critical payment, clearing and settlement activities. This is why the D-SIBs must have resolution plans, which describe how they could be resolved in an orderly manner, while ensuring the continuity of their critical financial services. CDIC is working with D-SIBs to ensure these plans are credible, so that in the unlikely event of a failure, Canadians can have confidence in the stability of the financial system.
The Resolution Planning By-law formalizes into law the requirements for the development, submission and maintenance of resolution plans by the D-SIBs. The by-law also sets out a process for highlighting and addressing deficiencies in those plans.
CDIC meets regularly with the D-SIBs to discuss their resolution plans. CDIC issued resolution planning guidance (PDF, 920 KB) to the banks, outlining our expectations and requirements in accordance with the By-law, and established a process for assessing resolution plans submitted by the D-SIBs under the By-law. CDIC must also be ready and capable to implement the resolution plan in the event of failure of its member, taking into account the circumstances at the time. Additional information about CDIC’s role as Canada’s resolution authority can also be found in the “What happens in a failure” section of our website.