Canada's Banking Institutions
There have been banks and lending institutions in Canada before we were even formally a country. Today though, banking has become a big economic driver of the economy and the banking companies deal in everything from personal banking and mortgages to credit cards and insurance.
The main bank in Canada, and the one owned by the Canadian people is the Bank of Canada. In 1933 a Royal Commission reported to the House of Commons that a central bank was a necessity. Shortly after in 1935 with the passage of the Bank of Canada Act, the Bank of Canada began operations. By 1938, the bank had become nationalized and thus it was fully under the direction of the government with the bank governor appointed by Cabinet.
The Bank of Canada Act, which has been amended numerous times since 1935, still directs the actions of the Bank of Canada. To this day, the Bank of Canada is beholden to, "regulate credit and currency in the best interests of the economic life of the nation."
Since the Bank of Canada serves as Canada's central bank, it has four areas of responsibility. Those areas are:
- Monetary policy - by keeping inflation low the bank hopes to contribute an economic air that will help raise Canadian living standards and promote strong financial performance.
- Financial system - the BOC actively promotes and encourages a safe and efficient financial system at home and abroad.
- Funds management - The federal government and others are provided quality and effective funds-management services by the Bank of Canada.
- Currency management - The Bank of Canada is responsible for issuing Canada's bank notes. This responsibility extends to bank note creation, their security, distribution and eventual replacement from the money supply.
Canada’s largest banks, or as they are sometimes called, “The Big Five” banks, includes Royal Bank of Canada, Bank of Montreal, Toronto-Dominion Bank, Bank of Nova Scotia, and the Canadian Imperial Bank of Commerce. The largest by manner of its market capitalization is the Royal Bank of Canada.