A Call For Higher CDIC Limits ! | Page 2 | General financial discussion | Discussion forum

Loonie said
Of course the limits SHOULD go up. They haven't kept anywhere near rate of inflation.

Of course, the Biggies WILL object, and maybe even some of the smaller ones.

I feel confident that a dual system, where you can buy higher insurance will never fly, because it brings attention to the possibility that a bank could fail and to the fact that insurance is limited - the last thing the banks want you to be thinking about.

Perhaps I am misinformed but it is my understanding that the big banks pay a lower rate for the insurance, and that the rates are confidential. Does anyone have any data on the rates the various banks actually pay?  

I do have a contact who has that knowledge - he says all banks no matter how large or small pay CDIC premiums based on the same formula. The big banks pay at the same rate - they do NOT pay at a lesser rate.
Remember that CDIC was meant to encourage Canadians to deposit/invest with the small players eg Peoples Bank, WealthOne etc. The big 6 are very secure so no real need to increase the limit. Do you really want to raise the $100K if the govt might need to compensate depositors who deposit excessively in WealthOne?
I think CDIC should stay the same. Most middle class and wealthy and business people already put very large amounts with the Big 6, and lower income or many middle class likely don't have $100K in banks including HISA or GICs.

canadian.100 said

I do have a contact who has that knowledge - he says all banks no matter how large or small pay CDIC premiums based on the same formula.
Remember that CDIC was meant to encourage Canadians to deposit/invest with the small players eg Peoples Bank, WealthOne etc. The big 6 are very secure so no real need to increase the limit. Do you really want to raise the $100K if the govt might need to compensate depositors who deposit excessively in WealthOne?
I think CDIC should stay the same. Most middle class and wealthy and business people already put very large amounts with the Big 6, and lower income or many middle class likely don't have $100K in banks including HISA or GICs.  

Are the big banks fundamentally different from Credit Suisse? Are they immune from mismanagement? Why?

WealthOne isn’t the only small bank. You picked on it because it probably shouldn’t have been given a licence in the first place. Frankly, if the government screws up then it should protect unwitting depositors.

Now… we know big banks will be bailed out. Thats what truly makes the deposits secure. The taxpayer. And then the same taxpayer is getting screwed again because low deposit insurance limits competition. Does not seem right.

mordko said

Are the big banks fundamentally different from Credit Suisse? Are they immune from mismanagement? Why?

WealthOne isn’t the only small bank. You picked on it because it probably shouldn’t have been given a licence in the first place. Frankly, if the government screws up then it should protect unwitting depositors.

Now… we know big banks will be bailed out. Thats what truly makes the deposits secure. The taxpayer. And then the same taxpayer is getting screwed again because low deposit insurance limits competition. Does not seem right.  

Hmm a very left wing bank haters view….

It’s funny when people keeps saying taxpayer bails out big banks in Canada. Which incident was it that make that statement true ? Or one has the crystal ball that I don’t, as that is the NEXT big event that has not happened yet…

And if it does happen, everyone will benefit from the bail out, whether you are an investor, a bank hater, or someone who is 100% in GIC only.
Imagine RY goes belly up and govt just let it fail, u think u will be fine just because u r not a RY investor ?? Think deeper…

savemoresaveoften said

Hmm a very left wing bank haters view….

It’s funny when people keeps saying taxpayer bails out big banks in Canada. Which incident was it that make that statement true ? Or one has the crystal ball that I don’t, as that is the NEXT big event that has not happened yet…

And if it does happen, everyone will benefit from the bail out, whether you are an investor, a bank hater, or someone who is 100% in GIC only.
Imagine RY goes belly up and govt just let it fail, u think u will be fine just because u r not a RY investor ?? Think deeper…  

Can we please keep “left” and “right” out of it?

As for your question, the taxpayer bailed out large Canadian banks in 2008. Three of them were in significant trouble (CIBC, BMO and Scotia).

Right now, the way I understand it, there is a formal government policy that in case of trouble any of the big 6 would be taken over. Yes, shareholders and creditors would lose everything while depositors would be ok. No, investors won’t benefit at all; they would betwken to the cleaners. Thats the plan, but things can change.

As for “best in the world”… Chest thumping is cool. Do you have experience of banking elsewhere? Canadian banking system is unfriendly to customers.

mordko said

Can we please keep “left” and “right” out of it?

As for your question, the taxpayer bailed out large Canadian banks in 2008. Three of them were in significant trouble (CIBC, BMO and Scotia).

Right now, the way I understand it, there is a formal government policy that in case of trouble any of the big 6 would be taken over. Yes, shareholders and creditors would lose everything while depositors would be ok. No, investors won’t benefit at all; they would betwken to the cleaners. Thats the plan, but things can change.

As for “best in the world”… Chest thumping is cool. Do you have experience of banking elsewhere? Canadian banking system is unfriendly to customers.  

How exactly did taxpayers bail out cibc, BMO and BNS ? Facts pls.

mordko said

As for your question, the taxpayer bailed out large Canadian banks in 2008. Three of them were in significant trouble (CIBC, BMO and Scotia).

 

Just for the record the Canadian Gov "Taxpaper" did bailed out large Canadian Bank throughout the 2008-2010 financial crisis, and according to the Canadian Centre for Policy Alternatives at some point during the crisis, three of Canada’s banks—CIBC, BMO, and Scotiabank—were completely under water, with government support exceeding the market value of the bank.

mordko said

https://www.cbc.ca/news/business/banks-got-114b-from-governments-during-recession-1.1145997  

Guess you choose to call it a bail out to make it dramatic.
Govt never take any equities stake nor lose a single penny on it. That by definition is NOT a bail out. TD and BMO issued bonds at almost 10% yield during the financial crisis, bond investors helped to bail them out, me included.
Everyone is free to call it whatever they want, that’s the beauty of freedom of speech, especially those that hates banks and claim they make too much money, add to that list telecom co, and of course groceries stores recently.

mordko said
Capitalism is awesome. Profits are great. Makes the world go round.

That we can agree on.
The rest I will agree to disagree.

I am surprised Mordko got suckered into that CCPA position that really is twisted junk. Taking insured performing mortgages off the balance sheet was about liquidity. It did not cost the taxpayer a dime.

It is about as false as Russia's rhetoric on the 'special operation'.