Canada became one of the richest nations in the world

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Canada became one of the richest nations in the world Industries were formed railway, mining, public utilities, manufacturing, retail sector Public policy, BNA Act Bank Act-(sound currency, stable banking system, strong financial systems) Mortgage loan +life insurance company Financial companies help entrepreneur’s startup companies. Funded larger companies (railway, public utilities company) Emergence of mining, manufacturing & retail Week 2 Bank Act of 1871 Growth in global trade & investment required the expansion of government oversight & international cooperation on financial governance Canadian banking system perceived as surviving the huge stress better than any other system in the world the stability of the banks was because of banking law and regulation of the 19 th century The bank act understood the nature of the market economy & what was required to facilitate its growth
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BNA Act gave government exclusive authority over banking, currency, interest and related matters Wanted to create national currency & coinage McDonald & Hincks recognized national unity would be enhance by having medium of exchange what was universally accepted & trusted throughout the dominion Knew it was essential to have a national currency & a national banking system Said that economic prosperity can only be achieved with public confidence in our banking institutions Foundations of Banking &currency in Canada together with proposal for bank act for the dominion of Canada Reliable form of money -either as a means of payment or to store value or help government with own finances did not exists A national banking system was required as a major element for raising a powerful and prosperous nation National Bank could be a safe depository of taxes, provide loans to government & keep chartered bank in line. Banks in Canada In lower Canada (the bank of Montreal) existed Its critical regulation of BMO was the liabilities of the bank-could not exceed 3 times its period capital & it had to be in specie gold or sliver Another feature of bank’s charter was – limited of 6 percent to be charged on advance to borrowers. The bank of the upper canada catered to the upper region in Canada After there was the union of upper & lower Canada Created a uniform currency Required banks to hold government bonds to secure their paper money issue in order to reestablish confidence in the financial system Banks of Montreal monopoly issuer of bank notes Bank notes issue was required to hold reserve of legal tender whether it was in gold or dominion government securities This world ensure public confidence in banking system Province of Canada also adopted their own dollar currency
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New Bank Act for dominion of Canada Would ensure sound system of currency and a bank system Establish a uniform federal act to replace all provincial charter & include items: o Minimum capital of $500,000 of which 10 percent to be paid up o
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