What Happens in a Failure

Risk-based approach

CDIC monitors the risks of our member institutions to identify early warning signs so that we can act quickly if necessary. CDIC regularly and systematically assesses each member’s financial risk profile (capital adequacy, funding and liquidity, profitability, and asset quality); its regulatory compliance and governance; and risks posed by its operating environment.

The level of monitoring and intervention of members matches their level of risk. Accordingly, CDIC members that pose an unacceptable level of risk will be placed on CDIC’s Watchlist and be subject to heightened monitoring and intervention activities as described the Guide to Intervention. More severe measures such as terminating the member’s deposit insurance could also occur.

CDIC works closely with the Office of the Superintendent of Financial Institutions (OSFI) throughout this process.

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