Bank Of Canada
Where do banks in Canada go when everything else fails?
Like a lost child who seeks its mother, banks also run to a mother bank, which organizes and fixes financial troubles of “baby” banks under its wings. For Canada, the Bank of Canada serves as the mother bank of all banks or in more politically correct term it serves as the central bank of the Canadian nation.
In its official website, the bank emphasizes that they are not a commercial bank that offers banking services to the public. Thus, the general public also cannot make a deposit in the Bank of Canada. The federal government, commercial banks, financial institutions, and other central banks are the target clientele of the bank.
The Bank of Canada rather stresses its bigger role of managing the overall banking system of the country as well as its economy. In fact, the government act, which created the Bank of Canada, defines the role of the bank as the promoter of the economic and financial welfare of Canada. To do this, the bank holds responsibilities specifically in making and implementing monetary policy, issuing bank notes, running the financial system, and directing funds management. For more than 70 years now, the bank has successfully fulfilled its role in maintaining Canada’s robust economy, which is one of the strongest in the world.
Initially, the Bank of Canada was founded as a privately owned corporation in 1934. Four years later, the bank became a Crown corporation attributing ownership to the federal government, which ultimately means that the Canadian citizens constitutionally own the bank. The bank, however, emphasizes its political independence. Unlike other federal institutions, the Bank of Canada is not a department of the government and its operations are absolutely independent from government control. Seventy years after its creation, the bank remains to stand tall and proud with its headquarters in the Bank of Canada
Building located at the corner of Wellington and Bank Streets in downtown Ottawa.
History
Economic depression pushed the creation of Bank of Canada during the early 1930’s. Government official, small and large-scale businesses, and the citizens realize that the lack of a regulating body that would control money supply, inflation rates, and foreign debt would further trigger economic downfall in the country. Thus in a 1933 Royal Commission, the Bank of Canada Act was passed in 1934 that paved the way for the bank to officially operate a year later.
As forerunner of the economy, Bank of Canada interest rates are kept low to maintain a full employment rate in the country. Bank of Canada rates have been a subject of debate and power conflict among government leaders of Canada during the early existence of the bank. But the mandate of the people being its constitutionally legitimate owners prevailed and a low Bank of Canada rate was prioritized and maintained.
As a central bank, the Bank of Canada also provides financial trust in managing the main economic progress of the country it serves and other countries it targets to serve. The stability of its monetary policies, for instance, is one of the determinants of foreign investors in measuring the potential of an economy that is worth pouring an investment. Thus, another task Bank of Canada has to fulfill in boosting the economy of the Canada is to increase investors’ confidence.
If you’re a would-be depositor, the Bank of Canada is not the bank of option for you. Rather you can check its financial policies in determining the stability and quality of services banks in Canada render. Checking the Bank of Canada would also be helpful for would-be offshore depositors who wish to open a bank account in Canada.