After the collapse of Silicon Valley Bank (SVB), Signature Bank, Crédit Suisse, and other banks, should we fear the contagion effect? If a bank failure occurs in Canada, what will happen to Canadian depositors' money?

These questions have recently been on everyone's lips, and consequently, in recent weeks, searches for bank failures on the Google search engine have increased.

Many Canadians are looking for answers, online and at the branches of the banks they deal with, about how to protect their money.

This is the case of Juan Pinella, who has a savings account and investments with two of the large Canadian banks.

The pilot, who lives between Toronto and Thunder Bay in the northwest region of Ontario, fears that disturbances in the US banking sector may extend to Canada.

Many people fear the domino effect, like the one that led to the global financial crisis in 2008.

If depositors panic and rush to banks to withdraw their money fearing a potential bankruptcy, this rush can put banks in a very bad position.

This is what happened in the case of Silicon Valley Bank: its clients, especially startups and venture capital firms, requested large amounts of their money that the bank had invested in long-term bonds.

But with rising interest rates over the past year, the value of these bonds decreased. To obtain liquidity, the bank had to sell these bonds, thereby recording significant losses in the value of these securities.

In Canada, the banking system is subject to strict standards. For example, the bank must ensure that it has sufficient liquidity in its treasury to meet the needs of its customers.

In the event of a bank insolvency in Canada, which is a very unlikely possibility, it is very likely that the depositor will not lose their money. The Canada Deposit Insurance Corporation (CDIC), a federal public institution, protects savings up to $100,000 per member institution and per deposit insurance category.

This amount, set in 2005, should be increased to take inflation into account in the opinion of many economists.

"This $100,000 is not a large amount for many people in Canada. Many people have deposited amounts exceeding this limit in one bank," said Professor Brett House, economics professor at Columbia Business School at Columbia University in New York.

However, House confirms that it seems all the measures put in place in Canada are bearing fruit.

Since 2001, no bank failure has been recorded in Canada, compared to 563 cases in the United States.

Professor House previously held the position of Deputy Chief Economist at Scotiabank, one of the largest Canadian banks. He adds that the Canadian banking system is more concentrated than its US counterpart. The six major Canadian banks own 85% of Canadian assets valued at 4,000 billion dollars.