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The video provides an overview of the Bank of Canada, detailing its role as the central bank of the country and its four key responsibilities: managing monetary policy, designing and distributing bank notes, stabilizing the financial system, and acting as the fiscal agent for the government. It also covers the bank's history, governance structure, and its operational independence from the federal government.

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The head office of the Bank of Canada is located at the Bank of Canada Building. In Ottawa, Ontario, it can be found at 234 Wellington Street. It was constructed between 1937 and 1938 by Montréal, Québec-based architect Sumner Godfrey Davenport, and finished by the Toronto-based company Marani, Lawson, and Morris. The Victoria Building on Wellington Street to the east of this structure was replaced by the Bank of Canada Building.

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Welcome to the Bank of Canada, the nation's central bank, dedicated to promoting the economic and financial well-being of Canadians. Founded in 1934, the Bank plays a crucial role in managing monetary policy, issuing currency, and ensuring financial stability. Alongside the Bank of Canada, five major financial institutions—Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, and Canadian Imperial Bank of Commerce—contribute significantly to Canada’s economy. Together, they provide a wide range of banking services, drive innovation, and support local communities. Explore our resources for a deeper understanding of Canada’s vibrant financial landscape!

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The five major financial institutions in Canada—Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, and Canadian Imperial Bank of Commerce—offer diverse banking services and promote economic stability.

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The video goes into detail on the Canadian dollar's sharp collapse, which has seen it fall to its lowest level compared to the US dollar since the pandemic's height. It examines the main economic causes of this devaluation, including interest rate differences, the possibility of increasing inflation, and the difference between the economic performance of the US and Canada. The movie also highlights the real-world consequences of this devaluation on Canadian firms, consumers, and the economy as a whole, emphasizing how lower dollar values impact buying power and raise the price of imported goods.

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Why is the Canadian dollar so terrible? | About That

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The video provides a comprehensive overview of the Canadian banking sector, focusing on the five largest banks in the country: Canadian Imperial Bank of Commerce (CIBC), Bank of Montreal (BMO), Scotiabank, Royal Bank of Canada (RBC), and Toronto Dominion Bank (TD). Each bank's history, significance, assets, revenue, and contributions to both the local and global economy are discussed, showcasing the robust nature of the banking industry in Canada and its crucial role in supporting the nation's economic framework.

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Top 5 banks in Canada | Quick Overview Biggest Canadian Banks

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In order to identify which bank is best for customers looking for a mortgage, host Nolan carefully examines the mortgage products offered by the main Canadian banks in the video. He stresses how crucial it is to look at things like prepayment privileges and total expenses in addition to interest rates. The video rates banks according to their mortgage flexibility and expenses over the course of the loan, taking into account each bank's unique advantages and disadvantages. Given its advantageous terms and conditions for borrowers, Scotiabank is ultimately determined to be the best option, but viewers are warned about certain potential drawbacks with each bank.

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Best Bank In Canada To Get A Mortgage | Part 1

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Question 1: What did you learn about your topic that surprised you the most?

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Question 1: What did you learn about your topic that surprised you the most?

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The biggest surprise recently between the Bank of Canada and the Big Five banks lies in their differing views on interest rate hikes. The Bank of Canada, aiming to combat rising inflation, indicated a more aggressive approach to increasing rates. In contrast, the Big Five banks expressed cautious optimism, suggesting that economic recovery might require a more gradual increase. This divergence has led to discussions about the impact on borrowing costs and consumer spending. As a result, Canadians are left pondering the implications for mortgages and loans, debates on financial stability and economic growth expectations.

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Question 2: Provide a real-life example of how this topic is relevant or interesting for you.

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Question 2: Provide a real-life example of how this topic is relevant or interesting for you.

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The house I live in has a mortgage at 3.75% expiring in two years presents an intriguing scenario influenced by both the Bank of Canada and the bank in which the mortgage is from.

As inflation rises, the Bank of Canada may consider increasing interest rates to stabilize the economy. This could mean that, after the two-year term, we may face significantly higher rates when refinancing. On the other hand, our bank might anticipate this shift and adjust their offerings, possibly providing competitive rates to retain customers or incentivizing early renewals.

This situation creates a delicate balance for my parents, who may need to stay informed on market trends and consider proactive financial strategies as their current mortgage term approaches expiration.

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Question 3: If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

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Question 3: If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

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Knowing more about Bank of Canada and the Big
Five Banks I would advise my family members if or when their mortgage expires to consider the following steps:

1. Review Your Current Mortgage
2. Check Current Market Rates
3. Evaluate Your Financial Situation
4. Shop Around
5. Consider a Mortgage Broker
6. Plan for Terms
7. Communicate with Your Lender
8. Get Pre-Approved
9. Engage a Financial Advisor
10. Prepare for Closing Costs

By taking these steps, you can make informed decisions that suit your financial goals when your mortgage expires.

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The document provides insights into the operations and recent activities of the Bank of Canada, emphasizing its role as the central bank in maintaining low and stable inflation. It includes reports on deliberations from the Governing Council regarding monetary policy, updates on the mortgage market, and announcements related to retail payment service providers, as well as upcoming events and recognitions.

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The Bank of Canada today published a report summarizing the feedback it has received to date about a potential digital Canadian dollar.

Executive Director of Supervision Ron Morrow discusses the creation and coming into force of a new supervision regime to oversee retail payments.

The Bank of Canada has announced the five finalist teams in the 2023-24 edition of The Governor's Challenge, a competition where university students simulate the role of advisor to the Bank's Governing Council.

Governor Tiff Macklem outlines how high inflation is hurting Canadians and how monetary policy is working to bring it down. He also explains why the Bank of Canada must stay the course in its inflation fight.

Senior Deputy Governor Carolyn Rogers talks about why interest rates could settle at a higher level than Canadians are used to and why preparing early for that possible outcome is important.

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The Bank of Canada is the nation's central bank. We are not a commercial bank and do not offer banking services to the public. Rather, we have responsibilities for Canada's monetary policy, bank notes, financial system, and funds management. Our principal role, as defined in the Bank of Canada Act, is "to promote the economic and financial welfare of Canada."

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Summary

​The document outlines the functions, history, and operational strategies of the Bank of Canada (BoC), detailing its roles in managing interest rates, money supply, and moral suasion in the banking industry.​ It discusses how the BoC influences economic activity through its control of the bank rate, the impact of money supply changes on inflation and deflation, and pressures it applies to banks regarding lending practices. The document also traces the historical development of the BoC, its establishment in response to banking crises, and its evolving monetary policy goals over the decades, including challenges posed by digital currencies and new financial technologies.

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The Bank of Canada (BoC) is the country's central bank, a financial institution that provides banking services on behalf of the federal government. Its operations include four principal functions: to manage the country's money supply; to act as the federal government's agent in issuing its bonds and managing its holdings of foreign currencies; to manage various monetary policies that can influence the performance of the economy, such as interest rates; and to manage the overall financial industry in Canada and economic relations with other countries and international organizations. The Bank of Canada's headquarters are in Ottawa.

Stone Railing at one of the entrances of the Bank of Canada. Photo taken on: November 17th, 2012

Operations

There are three principal ways the BoC fulfills its functions: interest rates, money supply and moral suasion.

Interest Rates

Interest rates are the cost of holding money. Interest is either earned by the lender or paid by the borrower and determines how much in loans can be afforded by individuals and businesses. Interest rates are in large part determined by the BoC because it is the principle lender of money to chartered banks and other lenders ( see Credit Unions). The interest rate charged to the country's banks for borrowing from the BoC is called the bank rate. This bank rate can be changed by the BoC at any time. Changes to the bank rate are passed on by the chartered banks and other lenders to individual and business borrowers in the rates they are charged to borrow. For example, if the bank rate is decreased by the BoC, chartered banks can lower the interest rate they charge their borrowers, who then tend to borrow more. As a result, economic activity picks up. If the BoC increases the bank rate, the chartered banks charge more for loans, and individuals tend to borrow less.

Interest Rates also influence the Canadian dollar exchange rate. Generally, if the bank rate is increased, more foreign investors wish to purchase Canadian investments, thereby driving up the demand for the Canadian dollar and raising its value relative to other currencies, and vice versa ( see Foreign Investment).

Money Supply

The BoC can change the supply of printed money and credit in the economy. To increase the money supply, the BoC buys federal government bonds from individuals and investors in the marketplace. This increased supply of money can be used to buy more goods and services, thereby increasing economic activity. The increased economic activity can cause prices to rise, which is called inflation ( see Consumer Price Index). This process also works in reverse, and the fall in prices is called deflation. The BoC regularly publishes statistics detailing the supply of money in the economy ( see Monetary Policy).

The BoC is responsible for the design, production and distribution of Canadian banknotes. The design, production and distribution of coins is the responsibility of the Royal Canadian Mint, a crown corporation.

Moral Suasion

As a manager of the banking industry, the BoC can put pressure on the chartered banks to adjust their banking policies. For example, in the mid-1950s, the BoC was concerned about the significant increase in consumer borrowing to purchase new hard goods (e.g., washing machines, televisions and cars) and its effect on inflation. In order to slow down inflation, the BoC pressured the banks to tighten lending to consumers and finance companies. More recently, the BoC has expressed concern to the banks about over-heating housing prices and household debt levels in the country ( see Real Estate in Canada). This type of pressure is called moral suasion and it is accomplished through both public and private means, in which the BoC persuades the financial industry to move in a certain direction. The BoC publishes extensive economic research to back up its policies.

History of the Bank of Canada

Canada did not always have a central bank. As the Canadian financial system developed in the 19th century, and before any significant banking crisis arose, a central bank was not deemed necessary. Instead, the largest bank in the country, the Bank of Montreal, acted as the federal government's unofficial bank. To supervise the banks, force change when needed, and encourage the banks to limit their risk-taking and to operate prudently, the federal government instituted 10-year review periods in the (enacted in 1871). The Act governed the banks' operations and the re-chartering of the individual banks (revised to every five years in 1992). Each bank issued its own paper money, or currency, that was exchangeable between the banks.

Under the Constitution Act, 1867, only the federal government could charter banks ( see Chartered Banks). This centralized control meant that provincial governments could not interfere with money creation to suit their own regional needs or political biases ( see Regional Economics). Banks could be national financial institutions from the very beginning, and this diversified the overall risk in the banking industry by allowing the banks to spread their loan risk geographically and across different industry sectors.

After Confederation, the Bank Act stipulated that one half of a chartered bank's reserves must be held in federal government bonds, called Dominion notes. This meant that the federal government could retain some control over the supply of money, since Dominion notes were used as security for the paper money issued by each chartered bank.

In the case of bank failure during these early days, the Bank of Montreal was generally expected to lead the industry's efforts to minimize the overall effects on the industry and solve the problem. In 1900, the Canadian Bankers Association (the CBA), an industry association of the chartered banks, was officially incorporated and given the right by the federal government to assess any prospective banker seeking a bank charter, thereby allowing the industry to regulate itself. This lead to the creation of the first centralized clearing system for the currencies of the banks under the supervision of the CBA.

Pressure for a Central Bank

The absence of a central bank had important consequences during the 1920s and thereafter. In 1923, the was up for revision, and public hearings began. Under pressure from the CBA, the new Bank Act was presented and passed with little change. This occurred just before the collapse of the Home Bank of Canada and financial troubles in several other banks in the same year. Public outcry was immediate, particularly by farmers and working-class Canadians who not only lost the bulk of their deposits but also lost a source of credit with the collapse of the Home Bank. Pressure grew significantly for a central bank to monitor and regulate the banking system and formalize national monetary policy with respect to interest rates and money supply and to guarantee a lender-of-last-resort policy should any other bank fail.

DID YOU KNOW?

A lender of last resort is an institution, usually a central bank such as the Bank of Canada, that offers loans to banks and other financial institutions that are experiencing financial difficulty.

Public pressure grew so intense that in 1924 the federal government established the office of Inspector of Banks to provide financial oversight of the chartered banks, a move endorsed by the CBA. However, the government did not create a central bank.

Between 1926 and 1929, the federal government began backing Dominion notes with the promise of paying gold when redeemed, a policy that marked the country's adoption of the gold standard. This meant that money supply would be tied to gold reserves held by the government. Because gold was in fixed supply, this made inflation management more challenging for the government, causing further displeasure.

Creation of the Bank of Canada

Public pressure for the creation of a central bank increased during the Great Depression, particularly among suffering farmers. In response, the Conservative government of Prime Minister R. B. Bennett established a Royal Commission on Banking and Currency in 1933 - known as the MacMillan Commission. As recommended in the commission's final report, the Bank of Canada Act was passed in 1934, and the Bank of Canada opened in 1935.

The BoC was privately owned at first, but became majority owned by the federal government in 1936 and fully nationalized in 1938. The first governor of the BoC was Graham Towers, a former management executive with the Royal Bank of Canada.

The BoC became the official clearing house for all of Canada's chartered banks (taking over this role from the CBA). All chartered banks were required to reduce their bank currency gradually over time and to replace it with a single, national currency: the Canadian dollar. This change of control in the issuing of currency was intended to appease populist demand (principally by farmers) to expand the money supply, and hence credit.

Immediately after the creation of the BoC and during the Second World War the federal government, through the BoC, increased money supply in the financial system to finance the increased production of wartime material. It did so by borrowing from the banking system through federal government bond issues managed by the BoC ( see Canada Savings Bonds).

Bank of Canada Head Office, Ottawa, 1942.

The Coyne Affair

Eventually, a conflict developed between the manner in which the BoC wanted to control inflation and economic growth and the manner preferred by the federal government. This occurred in the mid 1950s, when the BoC wanted to tighten credit in order to reduce inflation. At the same time, the Liberal government of Prime Minister Louis St-Laurent wanted to increase money supply and loans to increase demand and reduce unemployment. This period coincided with a change in management at the Bank of Canada, when James Coyne succeeded Graham Towers as governor in 1955, and the election the Progressive Conservative government of John Diefenbaker in 1957.

The developing "Coyne Affair" centred around a lack of clarity on the relationship between the federal government and the Bank of Canada, and which party ultimately decided on monetary policy.

Coyne was often publicly critical of federal government policy and took a strict policy of fighting inflation by raising interest rates, which alienated some politicians, academics and the public. In 1960, public and corporate outrage followed, culminating in a letter from 29 academic economists to the Finance Minister expressing their lack of confidence in the management of the Bank of Canada. In 1961, the Diefenbaker government asked Coyne to resign, which he refused, and then moved to fire him by passing a bill declaring his position vacant. However, Coyne submitted his resignation shortly after the Senate rejected the bill.

The relationship between the federal government and the BoC was resolved through negotiation when Louis Rasminsky became governor of the BoC in 1961. Going forward, the BoC would be given independence from the federal government in determining monetary policy. In 1967, changes to the Bank of Canada Act affirmed the BoC's control of day-to-day monetary policy but state that overall policy objectives are set by government.

Continuing Operations

The BoC has set several different policy goals during its operations, each based on the changing economic environment in Canada and globally. During the 1950s and 1960s, the BoC maintained a fixed exchange rate with the United States dollar in order to improve trade with that country ( see International Trade). This policy was abandoned in 1970 because the BoC found it untenable to maintain high interest rates and tight money growth when it was causing so much short-term capital inflow to the country, putting upward pressure on the Canadian dollar. The bank began to issue more money to reduce the value of the Canadian dollar, but this in turn increased demand for goods, leading to higher prices and inflation.

The Bank of Canada announced in 1975 that it would introduce a new policy of targeting money supply growth in its efforts to better manage inflation. This became more difficult once the chartered banks introduced new banking innovations that increased the turnover of money being spent in the economy (called the velocity of money). In 1982, the Bank of Canada announced it was abandoning growth targets of money supply and moving to the control of interest rates as a means to fight inflation. John Crow became governor of the Bank of Canada in 1987 and forcefully reiterated the point that the number one long term policy goal of the monetary authority would be price stability achieved through interest rate management.

As inflation continued to rise, the bank announced in 1991 that it would begin setting targets for inflation as its major policy goal. The target rate of inflation would initially be set at 3 per cent but would decline to 2 per cent before the end of the decade. This has remained the policy of the BoC since that time.

Current Challenges

In 2015, the Bank of Canada laid out a plan detailing how it would respond to future economic crises caused by circumstances similar to the financial crisis of 2008. The particular concern of the BoC is the potential challenges from non-banks, such as mutual funds, exchange traded funds, illiquid bond holdings, hedge funds and others. For example, what response is required by the monetary authorities should a mutual fund be unable to meet a massive onslaught of redemption requests in a short period of time out of its small cash position?

Digital Currency

The introduction of new technology to the financial system also poses a challenge to the BoC. The bank revealed in 2016 that it was developing the CAD-coin as a digital version of the Canadian dollar, a move in response to the rise in popularity of bitcoin and other blockchain-based digital currencies. The initiative will involve issuing, transferring and settling the central bank's monetary assets by way of a computerized ledger rather than by way of printed dollars. Research and experiments have been ongoing since 2016. Bank participants in this new initiative include Royal Bank of Canada, CIBC and TD Bank Group; institutional partners include Payments Canada and TMX Group.

Governors of the Bank of Canada

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The Bank of Canada (BoC) is the country's central bank, a financial institution that provides banking services on behalf of the federal government.

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The document discusses the major banking institutions in Canada known as the "Big Five" and "Big Six." The "Big Five" refers to the five largest banks based on market capitalization, while the "Big Six" includes an additional bank, the National Bank of Canada. It highlights the significance of these banks in the financial sector, their rankings by total assets, and their geographical distinctions, particularly the outlier of the National Bank being based in Montreal.

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What are the big five banks? And is it really the big six?

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