Posted on 08/26/2016 9:42:23 AM PDT by MeganC
Great idea for bolstering confidence in Canada’s banks.
“shareholders and creditors” are not depositors.
Headline doesn’t match story. I only read what’s posted here though.
What could go wrong?
Yeah... more cocaine for the addict... that will solve his problem.
The government can insure them.
What is your favorite idea?
That’s how I read it, too. But with the source being the Bank of Canada, it gives pause.
Apparently, poster has changed the headline. Not correct.
Following link, it is part of a canada budget titled:
Chapter 8 Tax Fairness and a Strong Financial Sector
There is a subsection on that page titled:
Introducing a Bank Recapitalization Bail-in Regime
Seizing depositor accounts is NOT part of the plan per the link.
How about the banks insure their own deposits?
I buy fire insurance on my house, paid for out of my own revenue.
Banks can buy insurance, paid for out of their own revenue (the split between what they pay for deposits and what they collect on loans).
If the bank doesn’t loan speculatively, that insurance premium should be fairly minor.
Can you explain why you posted a headline that the story does not support?
Read the article, particularly when the poster substitutes the keadlin ...
Currently they do.
In the US, through the FDIC.
In Canada, through the CDIC.
Do you have any evidence of that? I haven't found the act as passed, but the early drafts made clear that the 'eligible long term debt' covered didn't include insured deposits.
See my subsequent post 8.
Freeper posting this changed the headline. They misinterpreted it.
Yes. I did a word search also.
“Seizing depositor accounts is NOT part of the plan per the link.”
Not per the link, true. But the regulations that are proposed and as authorized by this budget convert depositors into creditors.
http://www.zerohedge.com/news/2016-03-22/its-official-canadian-bank-depositors-are-now-risk-bail-ins
The title of the budge section (as per usual with government language) doesn’t accurately describe what the section really does.
Not like our Congress ever does anything like that.
There has NEVER been a deposit insurance program where the funds haven’t run out during a crisis. FSLIC went broke and the FDIC went negative during the S&L crisis; the FDIC ran out of money again during the housing bubble crisis; the credit union insurer had a large credit union that sat in conservatorship for 5 years because they didn’t have the money to resolve (liquidate) it.
I get paid electronically directly to my checking account. Immediately I pay any bills and take out the cash that will not be immediately spent.
We keep $5 minimum balance in our “savings” account and usually under 20 in checking.
I don’t trust the banks any more. And the interest rate they pay on savings is so low I’d rather just keep the cash with me.
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