The Canadian subsidiaries of three foreign banks have opted out of membership in Canada Deposit Insurance Corp., meaning that deposits at those banks are no longer insured by CDIC.

The three banks — Sanwa Bank Canada, Sakura Bank (Canada) and The
Sumitomo Bank of Canada, all subsidiaries of Japanese institutions — have joined J.P. Morgan Canada and Rabobank Canada, which decided to drop out of CDIC earlier this year.

As a result of recent amendments to federal legislation, banks that accept only wholesale deposits, defined as $150,000 or more, may operate without deposit insurance.

“The purpose of this amendment was to allow financial institutions greater flexibility. I am sure a few more eligible member institutions will apply to opt out,” said CDIC president and CEO Jean Pierre Sabourin. “What is important is that the depositors of institutions that choose to opt out are fully informed that their deposits are not insured and that they are given options.”
-IE Staff