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Is it backstopped by the provincial government?
by advisedwang 4y ago
Is it backstopped by the provincial government?
- ceejayoz 4y ago> Section 271 of the Financial Institutions Act provides that the Provincial Government may provide financial support to the CUDIC Fund if the CUDIC Fund is impaired (see the CUDIC Fund Target Policy for further details about the CUDIC Fund).
- JumpCrisscross 4y ago> the Provincial Government may provide financial support to the CUDIC Fund Know nothing about Canadian law. But that doesn't sound like an obligation.
- acover 4y agoThe federal deposit insurance in Canada is the same (cdic). The relevant legislation explicitly says the government has no obligation to bail out the insurance fund. Practically the fund doesn't have sufficient funds to bail out a big bank failure - let alone multiple - and everyone expects a government bailout.
- rkagerer 4y agoThe Federal government can rely on printed money to cover Big Five bank failures. In BC, how would the government fund a bailout if several Credit Unions collapsed at the same time?
- acover 4y agoWhere there is a will, there's a way. The us federal reserve bought corporate bonds during the covid crisis. Can you imagine the fallout of a bank run on all credit unions? The federal government would find a way to prevent that.
- patmcc 4y agoNo, not really (the law says they "may" provide support to the deposit insurance fund), but even if it was, the province can't mint money, so that could only get so far.