Bank of Canada Week 8

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Unformatted text preview: nt of a central bank and on July 3, 1934 the Bank of Canada Act received royal assent. The Bank of Canada •  The Bank of Canada was originally privately owned, but was naIonalized in 1938. •  Some of the previous funcIons of the Department of Finance were transferred to the Bank of Canada. •  The Bank of Canada exists "to regulate credit and currency in the best interests of the economic life of the naIon." Monetary Policy •  Monetary policy deals with the amount of money in circulaIon in the economy. •  The central bank adjusts short term interest rates to sImulate monetary expansion by helping to maintain a low and stable rate of inflaIon. •  The Bank of Canada sets the overnight interest rate. Overnight Interest Rate •  This is the rate that banks use to borrow and lend to each other in short term transacIons. •  Each day, banks have num...
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