OTTAWA, ONTARIO--(Marketwired - Feb. 3, 2014) - Canada Deposit Insurance Corporation (CDIC) today welcomed an International Monetary Fund (IMF) report on financial stability, which praised Canada's legal and institutional powers for resolving federal financial institutions as 'robust and well-articulated'.
"We are pleased with the positive findings of the IMF report," says Michèle Bourque, CDIC President and CEO. "It confirms that we have established leading practices and that CDIC's operational capacity is well developed."
CDIC is the federal deposit insurer and Canada's resolution authority, which means it takes the lead when a member institution fails and must be closed or resolved.
The report also highlighted the effective working relationship and collaboration between CDIC and its federal safety net partners: the Office of the Superintendent of Financial Institutions (OSFI), the Department of Finance, the Bank of Canada and the Financial Consumer Agency of Canada (FCAC). In particular, it noted:
- the process of collaboration with other safety net partners is solid;
- OSFI and CDIC work together and are well advanced in developing recovery and resolution planning for domestic systemically important banks (D-SIBs);
- CDIC, OSFI and the Bank of Canada have established 'leading practices' in their areas.
The IMF acknowledged that CDIC meets the Core Principles for Effective Deposit Insurance Systems - an international set of principles developed by the Basel Committee on Banking Supervision and the International Association of Deposit Insurers.
The IMF Financial System Stability Assessment report is based on the work of the Financial Sector Assessment Program (FSAP). FSAPs assess the stability of a country's financial system as a whole and not that of individual institutions. They are intended to help countries identify key sources of systemic risk in the financial sector and implement policies to enhance resilience to shocks and contagion. View the report.
Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that contributes to the stability of the Canadian financial system by providing deposit insurance against the loss of eligible deposits at member institutions in the event of failure. Eligible deposits are automatically covered to a limit of $100,000 per insured category at each member institution. CDIC members include banks, federally regulated credit unions as well as loan and trust companies and associations governed by the Cooperative Credit Associations Act that take deposits. CDIC is funded by premiums paid by member institutions and does not receive public funds to operate.