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EQ Bank CEO on CDIC coverage
January 12, 2023
10:20 am
savemoresaveoften
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Bill said
Norman1, I'm aware the money stuff is all smoothed over, my question is really about why, why after 87 years, including Great Depression and WWII, of this never once happening, has it happened now?  

This is because first time they did a QE ever.

January 13, 2023
6:30 am
Doug
British Columbia, Canada
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AltaRed said
EQ has a vested interest in seeing CDIC limits raised since second tier banks don't have the same confidence (safety of deposits) from the average consumer that the big 6 banks do. The big 6 would rather there be no CDIC insurance for them because it is simply not needed with AA rated mega-institutions and they would save on CDIC premiums. They clearly don't want to pay premiums for $200k of deposit insurance as an example.

OTOH, it is particularly important for the average investor/consumer to have higher CDIC insurance in privately held FIs that are opaque in their financial disclosures (and lack of credit ratings) like People's and Wealth Bank of Canada, and for ones like Home Trust/Oaken that are barely investment grade and about to go private later this year.

If the Feds were to announce higher CDIC insurance limits, CDIC would have to bulk up its assets to take on the risk of higher insurance exposure.  

And soon to be Home Trust and Home Bank, which will be owned by one man!

Cheers,
Doug

January 13, 2023
6:32 am
Doug
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Norman1 said
Increase is not really needed.

The Big Five banks have figured a way to multiply CDIC coverage and avoid having to educate depositors about their strong debt ratings.

EQ Bank (that's really Equitable Bank) now has four CDIC members in its corporate family:

  1. Equitable Bank
  2. Equitable Trust
  3. Concentra Bank
  4. Concentra Trust

Must be someone there who can put the four pieces together to offer $400,000 of CDIC coverage.

Maybe the EQ Bank person should talk with their colleague running their deposit broker channel. For some reason, through deposit brokers, "All of our GICs are available through Equitable Bank, and its wholly owned subsidiary, Equitable Trust." sf-embarassed  

Two of those subsidiaries will very likely be amalgamated into the other two in the next 12-24 months. 🙂

Cheers,
Doug

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