Canada extends financial aid for millions for two more months

Re:Canada extends financial aid for millions for two more mo... by imtringued on Wednesday June 17, 2020 @03:11AM (#23548667)

Not all loans are guaranteed to be paid back. The interest rates the central banks offer require you to pay every single cent back. Defaults aren't permitted. Conventional banks take on the entire risk of default and they compensate for it by requiring collateral or higher interest rates.

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Re:Canada extends financial aid for millions for two more mo... by pingyong on Wednesday June 17, 2020 @06:14AM (#23549757)

>Defaults aren't permitted.

So, what happens if a bank goes bankrupt?

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Re:Canada extends financial aid for millions for two more mo... by mcherm on Wednesday June 17, 2020 @08:27AM (#23550542)

If a bank is in danger of running out of money, then (in the US, where I work in banking) the federal regulators step in and take over the bank. They sell off assets to other banks and pay depositors their money (up to the EXTREMELY generous limits of FDIC insurance). The funds to pay for the losses come from an insurance system ("FDIC") that all banks pay into. (And in case of a widespread collapse of many banks at once, the federal government underwrites the FIDC insurance program.)

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Re:Canada extends financial aid for millions for two more mo... by sattoshi on Wednesday June 17, 2020 @12:37PM (#23553396)

They get bailed out

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