Bank of Canada


The Bank of Canada is the central bank of Canada. The bank was established in 1934 with the Bank of Canada Act. The Bank of Canada is a special type of Crown Corporation, headquartered in the Canadian capital Ottawa. The bank of Canada doesn’t offer banking services to the general public. The Bank of Canada is responsible for Canadian monetary policy, issuing the Canadian currency, maintaining the Canadian financial system and acting as banker for Canadian government. According to the Bank of Canada Act the bank’s role is "to promote the economic and financial welfare of Canada".

Monetary Policy

The Bank of Canada is responsible for the monetary policy of Canada, controlling money supply (the total amount of money in the Canadian economy) and maintaining the value of the Canadian dollar. The goal of the Bank of Canada is to keep inflation around 2% per year. The Bank of Canada enforces its monetary policy by setting short-term interest rates.

Banknotes

The Bank of Canada is the only bank responsible for creating and distributing the official Canadian currency, the Canadian dollar.

Financial System

The Bank of Canada is one of the main organizations responsible for the Canadian financial system health. The Bank of Canada provides liquidity to Canadian financial institutions like banks and credit unions. The bank also fulfills the role of lender of last resort, for these institutions in case they have serious funding issues. The Bank of Canada is involved in Canadian financial markets as well, participating in the FOREX markets, buying and selling government securities and setting interest rates.

Bank of Canada Governor

The chief of the Bank of Canada is the governor, appointed for seven-year term by the bank’s board of directors. The current governor of the Bank of Canada is Mark Carney, who worked for Goldman Sachs before joining the Bank of Canada.



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