As another banking crisis looms, and Canadians are at risk..On Monday, Silicon Valley Bank was the lender to the tech industry and was on the list of the largest banks in the United States. Today, (10th March) after shares plunged 62% in overnight trading, the bank was closed down by regulators and the Federal Deposit Insurance Corporation has been appointed as the receiver in it’s impending bankruptcy,.There are many factors that brought this once successful institution to its knees. I’ll leave the detailed breakdown of those circumstances to the many financial gossip columnists in the mainstream media. To put it simply, the bank failed to adequately manage the risks in their lending portfolio..As with previous banking collapses, it will take some time before we can really get a full picture of the damage. We also don’t yet know who'll be footing the bill. Will depositors be left with losses or will the federal government step in with a bail-out like they did in the wake of the 2008 financial crisis?.As we're once again reminded of the dangers posed by our over-complicated financial system, it’s important for Canadians to remember the Trudeau government made it clear it will not step in to help Canadians in the event of a bank failure..In Canada, we have a bail-in regime rather than the potential for bail-outs like our neighbours to the south. This means if our banks fail, Canadian depositors will be on the hook..In Canada, bank deposits up to $100,000 are protected by the Canada Deposit Insurance Corporation(CDIC). Eighty-five member institutions pay premiums into the CDIC. The CDIC listed total assets were $7.3 billion as at March 31, 2022. And more than $1 trillion worth of deposits in member institutions are covered by the CDIC..But the failure of even a single bank could completely wipe out this insurance..Canadians should prudently assume any money held in the bank is at risk..How much risk? I don’t know. It’s possible no one actually knows and that’s the problem..In our modern, multilayered financial system, it’s virtually impossible to manage all the risks all of the time. It only takes one big mistake to wipe everything out..You definitely don’t want to be among the last ones to attempt to take your money out of the bank. As we’ve seen in countless examples from around the world, from Lebanon to Argentina, if everyone tries to take their money out of the bank at the same time, the money simply isn’t there..Now is the time for Canadians to take control of their money. Whether it’s gold, bitcoin or even cash under the mattress, being in custody of your own wealth has never been more important..Disclosure: Bitcoin Well is an advertiser with the Western Standard
As another banking crisis looms, and Canadians are at risk..On Monday, Silicon Valley Bank was the lender to the tech industry and was on the list of the largest banks in the United States. Today, (10th March) after shares plunged 62% in overnight trading, the bank was closed down by regulators and the Federal Deposit Insurance Corporation has been appointed as the receiver in it’s impending bankruptcy,.There are many factors that brought this once successful institution to its knees. I’ll leave the detailed breakdown of those circumstances to the many financial gossip columnists in the mainstream media. To put it simply, the bank failed to adequately manage the risks in their lending portfolio..As with previous banking collapses, it will take some time before we can really get a full picture of the damage. We also don’t yet know who'll be footing the bill. Will depositors be left with losses or will the federal government step in with a bail-out like they did in the wake of the 2008 financial crisis?.As we're once again reminded of the dangers posed by our over-complicated financial system, it’s important for Canadians to remember the Trudeau government made it clear it will not step in to help Canadians in the event of a bank failure..In Canada, we have a bail-in regime rather than the potential for bail-outs like our neighbours to the south. This means if our banks fail, Canadian depositors will be on the hook..In Canada, bank deposits up to $100,000 are protected by the Canada Deposit Insurance Corporation(CDIC). Eighty-five member institutions pay premiums into the CDIC. The CDIC listed total assets were $7.3 billion as at March 31, 2022. And more than $1 trillion worth of deposits in member institutions are covered by the CDIC..But the failure of even a single bank could completely wipe out this insurance..Canadians should prudently assume any money held in the bank is at risk..How much risk? I don’t know. It’s possible no one actually knows and that’s the problem..In our modern, multilayered financial system, it’s virtually impossible to manage all the risks all of the time. It only takes one big mistake to wipe everything out..You definitely don’t want to be among the last ones to attempt to take your money out of the bank. As we’ve seen in countless examples from around the world, from Lebanon to Argentina, if everyone tries to take their money out of the bank at the same time, the money simply isn’t there..Now is the time for Canadians to take control of their money. Whether it’s gold, bitcoin or even cash under the mattress, being in custody of your own wealth has never been more important..Disclosure: Bitcoin Well is an advertiser with the Western Standard
