Insured by Canadian Investor Protection Fund for $1,000,000/account... Which has NOTHING to do with the Canadian Government... But is an industry insurance fund like SIPC. http://www.cipf.ca/ This kind of insurance works ONLY if a few brokers fail... Is useless in a systemic financial failure. But relative to other countries... Canadian banks are in great shape... Due to stricter regulation and luck. http://www.thestar.com/Business/article/511760 But you are basically right... Except for gold... The safest place for your money is a Canadian IB account. In theory... IB USA could go bankrupt... While IB Canada does not.
I am also worried about IB. I think they are very safe because of their conservative approach however the weak link is if one the banks where they deposit money fails. JP Morgan is exposed in Credit Default Swaps at a level that far exceeds its assets. CDS is the next big thing after subprime debt. Bank of America and Citibank are not in very good shape either. If one of these goes bust then IB will have trouble getting their (our) money. The main point is although IB may be the last broker standing after the rest fail I am not so confident about the banks. Then they supposedly would have to look into their $4 billion in assets to reimburse customers. I don't know what these assets are, whether they will depreciate in such a climate, how long the customers will have to wait etc...
pigifan, they issued a statement regarding the issue. they said they did spread the assets in a way they consider the most safe solution available. (I don't think they have much $$$ at JPM) Petterfy is a very clever guy and he certainly sees the risk with C, JPM ...
Thanks for the reply local crusher. I will not withdraw my money from IB because I think now it is a great time to trade and IB is as safe as it gets however I will be watching the share price and news from the six banks where they deposit money like a hawk. The six banks are JP Morgan Deutsche Bank Bank of America and smaller amounts in Citibank HSBC US Bank If anyone has any news about these banks I think it would be of benefit to people that have funds in IB to mention it in this thread.
I saw and ad for IB on Bloomberg. They stated they we not exposed to the trash, MBS. This alone made me afraid. If everything was fine they need not tell everyone. Think back to LEH,BCS,AIG,FRE,FNM,WM. They all said everything was fine, and our leaders backed them up[, Cox said Bear was in good shape. Paulson said the crisis is contained.
The difference is that IB is saying we don't have any of the crap that is causing problems. Those other companies said we have the problems, but they're under control. Big difference. Unless IB was secretly buying CDOs or whatever I can't see how they'd be exposed to this mess (other than their holdings in banks being at risk which seems unlikely given the banks named are generally too big to fail). I don't think the fed can afford to let anyone else go under or risk a panic/crash, so they'll just print money and lend it until gold is $2000 an ounce.
if ib is lieing then you'll all know what to do...:eek: Knock Out: CNBC Confirms Lehman CEO Punched at Gym http://www.businessandmedia.org/articles/2008/20081006150152.aspx
http://www.interactivebrokers.com/en/general/education/faqs/safetyFAQ.php?ib_entity=llc First 2 paragraphs How Does IB Protect My Money? IB protects your money by following a variety of regulatory requirements and then taking a number of other steps that are well beyond the basic requirements. Here are the basics: First, for cash in your IB account, IB is subject to strict âreserveâ and âsegregationâ requirements imposed by the Securities and Exchange Commission (âSECâ) and the Commodity Futures Trading Commission (âCFTCâ), under which cash in IB customer accounts is kept in segregated accounts that are separate from the proprietary assets of IB. IB is required to perform daily (CFTC) and weekly (SEC) calculations to ensure that the proper amount of customer funds is set aside in these separate accounts. As of mid-September 2008, IB customer cash is held to a large extent in U.S. Treasury bills (under 10%), deposits with multiple large banks (85-90%) and federally-approved AAA rated money market funds (less than 2%) -- all subject to continual review by IBâs senior management. The majority of the bank deposits are held with JP Morgan, Deutsche Bank and Bank of America, with smaller amounts held with Citibank, HSBC and U.S. Bank