CDIC Deposit Insurance Requires Reform

TORONTO, Feb. 26, 2024 /CNW/ – The Global Risk Institute (GRI) today released a report that calls for a substantial review of the current approach to deposit insurance in Canada including an increase in the level of insurance coverage. Full report available at

Canada operates with a 1960s designed “one-size-fits-all” approach. Canadians need a more flexible structure that responds to the needs of individuals and small businesses while contributing to the overall stability of the banking system.

Sonia Baxendale, GRI President and CEO, said: “An updated approach is needed to bolster the system’s robustness against current and evolving risks. Our report provides recommendations to meet those goals while retaining the public’s confidence in the system.”

Canada Deposit Insurance Corporation’s (CDIC) coverage levels have not kept up with income and asset values. Since 2005, Canada’s GDP doubled to USD$2.1Trillion and the TSX index went up by 72%. CDIC Deposit insurance coverage levels need to be in line with international peers who typically offer higher coverage limits. After the financial crisis, the U.S. insurance coverage was raised to US$250,000 while Canada held its coverage at CAD$100,000.

For deposit insurance to serve effectively as a macroprudential tool, it is essential to appropriately design and manage the system.

Global Risk Institute’s recommendations include:

  1. Raise the Statutory/Basic Coverage to $250,000 per account
  2. Offer Voluntary Coverage of $500,000 per account for personal & $5,000,000 per account for business
  3. Allow Unlimited Excess Coverage by Customer (to be determined by insurance provider)

Technological changes, like social media posts and the automated algorithms that promote them, as well as new digital technologies allowing depositors to transfer millions of dollars, contributed to the fastest deposit run in U.S. history at Silicon Valley Bank in 2023.

“Driven by technological change, the operating environment for financial institutions has changed. Looking to the future, we anticipate further shocks from climate change, demographic and geopolitical shifts and advances in AI and other technologies. The deposit insurance system designed to protect small, less sophisticated depositors over 50 years ago needs to be reformed.” said Gerard McDonald, Managing Director and Head of Research, Global Risk Institute.

About GRI: The Global Risk Institute (GRI) is the leading forum for ideas, engagement and building capacity for the management of risks in the financial services sector. We are a non-profit, public and private partnership with 49 government and corporate members from asset management, banking, credit unions, insurance and pension management. GRI’s goal is to develop fresh perspectives on risks, to engage members, and to enhance risk management skills. Our activities support academics, corporations, policy makers and regulators. We take a global view of the risks facing the financial services industry from our base in Toronto, Canada.


SOURCE The Global Risk Institute in Financial Services

For further information: Media contacts: Graeme Harris, Strategic Profile Management, +1 416-402-7050


Click to download this publication Deposit Insurance in Canada: Recommendations for Reform