Reimbursement to Depositors Communication with Depositors

1. Reimbursement to DepositorsCommunication with Depositors Scott Hayes Director, Risk Assessment & Intervention Canada Deposit Insurance Corporation

2. Communications with Depositors • CDIC Background • Founded in 1967 • 43 failures historically having $26 Bn. deposits • Last failure June, 1996 (17 years with no failures) • CDIC Today • 82 member institutions • $2.0 trillion deposits • $650 billion insured deposits • Up to $100,000 coverage per category

3. Communications with Depositors • Public Awareness of Deposit Insurance Coverage and Limits • In Canada awareness of CDIC ranges between 55-60% • The percentage of Canadians who know (unaided) the dollar limit of coverage ranges between 24-28%

4. Communications with Depositors • IADI Enhanced Guidance on Reimbursement Systems and Processes Essential pre-closure activities includes: “Developing the communications strategy for dealing with the failure of the bank.”

5. Communications with Depositors • Intervention Communications Plan (“ICP”) prepared as soon as a member institution is moved to CDIC’s acute watchlist. • Purpose – • To guide CDIC through the communications steps required by the failure of the bank. • To identify audiences and deliver messages designed to facilitate financial stability in Canada in the midst of the failure of the bank.

6. Communications with Depositors • ICP contents • Overview of the bank and the environment • Communications objectives and strategy • Target audiences and message(s) • Bank depositor profile • Critical path of communications plan • Assignment of tasks in communications plan • “Q’s & A’s”

7. Communications with Depositors • Information sources for ICP • In the public domain • Provided by the Regulator • Requested directly from the Bank • Obtained during the preparatory examination

8. Communications with Depositors • CDIC Communications Channels • CDIC’s general website and call centre • ‘Intervention’ website and call centre • Social media – Twitter and Facebook • Media briefings and outreach to key media • Letters to depositors • Email and/or letters to deposit brokers

9. Communications with Depositors • Target Audiences – with possible differences in the message: • Depositors of failed bank • Deposit brokers • General public/deposit customers of other member institutions • News media and market analysts • Safety net partners

10. Communications with Depositors • 30 days after the bank failure CDIC will hold a ‘post mortem’ or ‘debrief’. • Solicit the ‘good, bad and ugly’ experiences from CDIC staff, liquidator, media monitoring, and public relations firm • Consideration would also be given to testing the public’s image of CDIC shortly after a failure.