Is it time for Canada's deposit insurance limits to rise?
First came the bank run, then the demise, ofCalifornia-based Silicon Valley Bank two weeks ago.Soon after,New York-based Signature Bank also collapsed.
These back-to-backepisodes the second- and third-largest bank failures in U.S. history, respectively compelled American officials to act publicly to prevent a broader financial crisis.
"We are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system," officials from theU.S. Treasury, Federal Reserve and Federal Deposit Insurance Corporation (FDIC),said in a joint statement after the headline-making bank failures.
These actions included guaranteeing all of the failed banks' deposits, including thosefar exceedingFDIC deposit-insurance limits.
Deposit insurance protects people's money in the event of a bank failure. In the U.S., the FDICcovers up to $250,000 US per depositor, for eachFDIC-insured institution, and per eligible category of account.
But for the Silicon Valley and Signature cases, authorities opted tofully protect all affected depositors even those with millions of dollars in deposits, which normally wouldn't be entirelyinsured.