Bank of Canada Week 8

Money supply data is recorded at the central bank this

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Unformatted text preview: wers over the banking industry •  Regulates them •  Imposes reserve requirements •  Acts as a lender- of- last- resort to miIgate things like bank runs –  Is usually separate from government to protect it from poliIcal interference Issuing currency •  Money has a long history as a means of exchange. The value of money was formerly Ied to the value of the metal it was made out of (i.e. copper, silver or gold). •  Paper notes eventually replaced coinage as the main source of money, mainly because the weight of coins made them cumbersome for usage when large amounts of money were required. •  Currently, the central bank holds assets (foreign exchange, gold or other valuable assets). •  Based on the value of these assets, and on the sale of bonds to the...
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