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danw17, not sure what CDIC rate you're referring to as CDIC pays no interest. It covers (up to $100k) your accrued interest and principal on your savings vehicle until date of FI default, nothing after that.

I find it unimaginable that anyone, no matter how diligent, could protect themselves from fraud perpetrated by rogue bank employees or officers.

Nick Leeson comes to mind. No doubt, if Baring's, which was at that time considered a very solid bank, "banker to the queen", knew what he was up to, they would have sacked him immediately. But they didn't. The regulators didn't. And certainly your average diligent individual didn't. For those who aren't old enough to remember, this was one of the biggest bank frauds in history, and took EVERYONE by surprise. https://www.theguardian.com/business/from-the-archive-blog/2015/feb/24/nick-leeson-barings-bank-1995-20-archive

Ultimately, it's not about "trust". It's about regulation, enforcement, and vigilance. The banking system is far too complicated for any of us to be able to detect fraud that has not been noticed by any regulator. We have no choice but to put our "trust" in regulatory systems. Our vigilance would be better directed towards being watchful about keeping them strong than trying to analyze whether there is going to be fraud at the bank.

No, it's not "abundantly clear" at all. It's not even apparent.

It was Leeson himself who held the unauthorized positions. "Unauthorized" means Baring's did not sanction them.

Internal controls were certainly lacking, and that is why British authorities subsequently overhauled their regulatory system. It's obvious you can't depend on any bank to police itself. That was my point, that we need to look at tightening regulatory systems. Same issue with mortgages here now.

All organizations want to be left to police themselves, but it is never adequate. Compliance takes time and money and detracts from the bottom line, so you can expect them all to fight it, but it's what's best for consumers.

Bill said
Based on my work experience, I saw zero evidence that folks in the public sector or in regulatory positions are less corruptible, when presented with opportunity, than those in the private sector. I don't share the confidence some have in the "authorities".  

This is very true. A little hush money could cause I large fraud. Hard to determine which banks would deal like this. Home Capital not disclosing things to investors really scared me away from ever doing business at Oaken or Home Capital. Even if it's really not a completely rational fear (based on solid facts).

Loonie said
Let's not slam the public service on the basis of some unspecified and undocumented personal experiences. I'm sure we can all think of something, good or bad.
The point is not whether certain individuals are corrupt or corruptible. Protecting the public is not the job of corporations, whose primary job is to make money for shareholders in whatever way they can get away with while trying to convince us to be "loyal" to them. Checks and balances require that there be stringent controls in place to protect the public. At the first level this involves regulation. If there is nothing to enforce, then it's the "wild west" out there and you'd better hide your money under the mattress.  

You are very correct because information take some time to spread and register in the mind of people, so it may not be reasonable to just rely on intervention from the market via the form of monitoring from large institutional investor or activist shareholder.

Loonie, perhaps sarcasm is not welcome to you, but I'm ok with it - whereas I don't welcome it when someone tells someone else he or she might have a lot to learn about a topic if they hold a certain opinion about it. So due to the myriad of differences in personal tolerances, I suggest we not tell others what has or hasn't a place here, and leave it to Peter to intervene when he feels it's needed. Thanks.