Canada’s bail-in regime has a lot of people worried about whether or not their money is actually safe in the bank. Despite reassurances from the Finance Department, questions still linger about who would be on the hook when a too-big-to-fail bank runs into a crisis.
First, let’s take a look at what a bail-in means. It’s the opposite of a bank bail-out, which you’ll remember from the 2008 financial crisis. None of Canada’s big banks needed help, but across the United States and Europe, taxpayers would up on the hook for massive amounts of money to save systematically important banks. In the aftermath, there was a new global push to protect taxpayers at the expense of a bank’s creditors and shareholders.
The Finance Department has reassured Canadians that their deposits and GICs will be protected in the event of a bail-in. The big question that remains is whether or not large depositors (with deposits over $100,000 that are guaranteed by the Canada Deposit Insurance Corp.) will also be exempted, a question the Finance Department has remained strangely silent on. But even with the implication that large deposits would be protected, that’s a policy that could easily change in the event of a financial crisis that threatened banks and their shareholders. No one can predict the scale of the next financial crisis or whether or not Canadian banks will weather the storm as well as they did in 2008. The fact is, depositors are considered a bank’s creditors, and the bail-in regime depends on creditors turning debt into equity. The average Canadian may be safe, but high net worth individuals could be liable for billions.
With bank bail-ins becoming the new global standard for banks in preparation for the next financial crisis, many high net worth investors are wondering if their money is safe in the bank. When it comes to low-yield investments like GICs and cash savings accounts, they simply may not be. What’s the solution to protect your wealth in the event of a bail-in regime? It might just be gold.
Thanks to gold dealers like Silver Gold Bull, you can safely keep large deposits of gold out of the bank. Using allocated storage, you can avoid the banks altogether while still investing in the future. Gold may not have the yields that equities offer during a strong market, but the value of gold typically goes up in the wake of a financial crisis. Allocated storage with Silver Gold Bull is the securest place for your gold in a crisis.
To start moving your wealth into gold away from the banks, check out the live price of gold today and talk to a gold expert about the smartest way to shift your wealth. One tactic you may want to consider is dollar cost averaging, where you buy the same dollar amount of gold once a month (or any period of time) regardless of the price. It’s easy to do with Silver Gold Bull, which offers a relatively low threshold for free shipping. That way, your gains from buying gold at low prices counter-balance your losses from buying gold at higher prices. Anyone worried about the safety of their deposits should think about buying gold and storing it outside the banking system.