What happens in a failure

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What happens in a failure

Canada’s financial system is strong and stable. Canadian financial institutions must meet high standards to maintain their safety and soundness, but like any business, they can fail.

If a bank fails, CDIC has a variety of tools to resolve the situation. We protect depositors and contribute to the stability of the financial system.

What is resolution?

Resolution is the process to restructure or close a financial institution that is failing or likely to fail.

In Canada, CDIC is the resolution authority for all its members – from the smallest to the largest. This means CDIC takes the lead when any of its members reaches the point when it is no longer viable. Since our creation by Parliament in 1967, CDIC has handled 43 failures（https://www.cdic.ca/about/our-history/history-of-failures/）, affecting more than 2 million depositors. No one has lost a single dollar that is under CDIC protection.

Our objectives in resolution are to:

Protect eligible deposits

Maintain the flow of critical financial services