This session centered around the GRI report entitled “Deposit Insurance in Canada: Recommendations for Reform”. The authors spoke about the conditions that point to the need for reform, namely: 

• CDIC limits were last updated in 2005 and have not kept pace with inflation and asset value fluctuations;  
• Social media and electronic banking have dramatically increased the speed of potential bank runs;
• Business accounts with large, uninsured balances are a threat to the stability of the financial system; and
• An increasingly interconnected global economy has increased the potential impact of non-financial shocks like COVID-19.  

The authors presented a comparison of deposit insurance systems around the world, and several options for reforming the Canadian system. These included increasing the coverage limit; providing unlimited coverage to all depositors; allowing banks to opt for higher coverage; introducing different limits for different types of accounts; and allowing individual depositors to purchase higher coverage. GRI’s recommendation was to increase the coverage limit and offer voluntary coverage for banks and depositors. 

Michael Mercer from CDIC spoke about the crown corporation’s role and emphasized the importance of clarity and transparency in empowering depositors to navigate the system effectively, while also stressing the need for balance between coverage and cost.