CDIC welcomes bail-in legislationBy Andrew Rickard | April 26 2016 10:19AM
The Canada Deposit Insurance Corporation (CDIC) has issued a statement welcoming new "bail-in" legislation that will see bank losses covered by shareholders and investors. It notes that depositor funds protected by CDIC would not be caught up in the measures.
In the federal budget last month, the Liberals introduced plans for a bail-in regime that would shore up a failing bank's finances using money from shareholders and creditors rather than from taxpayers. The measures are meant to allow the bank to remain open during recapitalization, and also address the potential risks that might arise from an institution being perceived as “too-big-to-fail”.
Savings remain protected
In a statement released on April 20, CDIC expressed its support for the legislation on the grounds that it will help ensure the continuity of essential financial services should there be a bank failure.
"Bail-in would not change the deposit protection offered by CDIC," explained Michèle Bourque, president and CEO of CDIC. "We think it is important that Canadians understand their hard-earned savings remain protected by CDIC, as they have been for nearly a half century."