Mssrs. Harper, Flaherty and Carney - RE: Bail/CDIC

Mssrs. Harper, Flaherty and Carney - RE: Bail/CDIC

 

I had emailed you some time ago with respect to CDIC insurance, but have yet to receive a response. My unanswered concerns are shown again below:

Depositors falsely entrust their money to banking community. They are in fact “unsecured” creditors – they actually “lend” money when they make a deposit. The only hope you have of recovering your money, in the event of a bank failure, is CDIC (Canadian Deposit Insurance Corporation) insurance. Your deposits should be insured up to $100,000.00 (in Canada).

The extent to which CDIC would bail-out depositors in a major financial collapse has yet to be tested. As you can see from the data below CDIC coverage may be “hot air”. Even if CDIC borrowed the additional $17 billion from the Federal government, only 3% of the total depositors would have coverage – or each depositor would receive 3 cents on the dollar (and we have no more pennies!). Technically, 97% of depositors would lose their money.

According to the CDIC's 2010 Annual Report, CDIC protects $590 billion CAD in total eligible deposits, and has $1.95 billion CAD in assets to meet insurance claims.^[4] This amount represents 0.33% of total eligible deposits. The CDIC is also authorized to borrow up to $17 billion if necessary from the federal government or the financial markets, and may request further funds from Parliament.

In these uncertain financial times we must demand that our government insure at least 100% of the insurable deposit limit for every applicable depositor (i.e. $100,000.00).

In addition, governments must provide alternative avenues of “funds management”. My RRSP’s are held by financial institutions. If I withdraw my funds I would be taxed. Alternatively, the only way of receiving a tax deduction is to deposit RRSP funds into a bank or financial institution. This is a catch-22. Investors should be able to withdraw these funds “tax-free” and provide their own guardianship - in these uncertain times a mattress would suffice. In the absence of secure depositor financial protection we must demand free non-taxable access to our funds. If our government is willing to protect the “criminal banking community” then we must demand equal justice.

Mr. Harper I want to take my money out the banking system. I want to withdraw my RRSP funds tax free. What solutions do you have? I don’t trust the banks and I don’t trust you.

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Can you please provide a response to the concerns I have raised above? Additionally, Mark Carney and Al Flaherty’s office recently stated the following:

Canadian savers with accounts in the country's six systemically important banks need not worry, however, he said at an event in Washington hosted by Thomson Reuters.

"Canadian institutions have substantial unsecured debt obligations in the wholesale market and as well as other classes of capital, and they have substantial capital as well, so once you stack all of that up, regardless of whether one would look to reach into it ... it's hard to fathom why it would be necessary," the Bank of Canada governor said.

Flaherty’s director of communications Dan Miles repeated the pledge: "The 'bail-in' scenario described in the budget has nothing to do with consumer deposits and they are not part of the `bail-in' regime. Under a `bail-in' arrangement, a failing financial institution has to tap into its own special reserves or assets (which it has been forced to put aside) to keep its operations going."

Additional questions:

1.   Are depositor savings not held by the systemically named banks at risk?

2.   I contest Mr. Carney’s remarks that banks have substantial capital. Banks must not be “too big to fail” and they serve no critical function in our economy.

Here is an important final note; the Canadian national debt is approximately $610 billion or $17,000 for every man, woman and child in Canada. The already monetized and unreported derivative loss for the six systemically important banks total $20 trillion, or $555,000 for every Canadian man, woman and child. That’s “32 times higher” than our nation’s debt. So what substantial capital do the banks have that could erase this quantity of debt?

 

Is it not time we expose the banking system for what it is – a corrupt, fraudulent PONZI scheme. Hard working people have not created toxic assets or schemed to deplete people of their hard earned money. Let’s shut down the banks, and if they fail, the bond holders and shareholders should be left holding the empty bag, not the Canadian public.

Thank you,
Joseph Pede