Following the collapse of Silicon Valley Bank (SVB), experts say the prospect of a bank failure in Canada remains low and highlight the process by which depositors could get their money back.
Trevor Tombe, a professor of economics at the University of Calgary, said in a phone interview on Tuesday that Canada has several agencies which ensure the nation’s banking sector remains stable. He said the main regulating body is the Office of the Superintendent of Financial Institutions , which monitors and audits Canada’s main banks.
“If it's an unregistered account, you're literally sent a cheque. If it's something like an RRSP [Registered Retirement Savings Plan], then that takes a little bit longer and they try and move that account to another financial institution,” he said. “So it's not a limit to you personally, in terms of the total amount that you have at a bank. It's a limit just on an account-by-account basis.”
“So what would happen is that if one of the big Canadian banks got into serious trouble, I think there'd be a rescue or significant help for one of the other agencies of the federal government apart from CDIC,” Booth said. The prospect of a bank failure in Canada is “extremely unlikely,” Booth said due to the conservative nature of its banks and regulators.
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