What Happens in a Failure

Financial Institution Restructuring Provisions (FIRP)

When a buyer(s) exists, CDIC can take control of a failing bank for a short period of time to complete its sale, merger or restructuring. The sale would ensure that insured deposits are protected. With the approval of the government, a forced sale would be used when shareholder consent of the transaction is not expected or the time to obtain consent would take too long.

There are two types of forced sales:

  1. All shares are transferred to CDIC and it becomes the sole shareholder to facilitate the sale.
  2. CDIC is appointed receiver to sell all or some of the failing bank’s assets and liabilities to the buyer.

For more info, consult our backgrounder on the Forced Sale resolution tool.

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