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Word Count: 2,490
BANK OF CANADA A central bank is the principle monetary authority of a nation The key role of the Bank of Canada is to conduct the countrys monetary policy which means managing the flow of money and credit in the economy in order to preserve the trust in the value of money As a central bank the Bank of Canada oversees many issues concerning the economic and financial well being of Canadians The Bank of Canadas direct customers are the federal government the chartered banks other financial institutions and other central banks in foreign nations However the Bank of Canada is accountable to all Canadians To begin with the history of the Bank of Canada will be discussed mentioning how and why it was founded The objectives of the Bank of Canada and its functions will also be explained Moreover the individuals who manage the Bank of Canada and implement policies will be discussed Finally the Bank of Canadas role in the monetary policy will be examined THE HISTORY OF THE BANK OF CANADA Before the 1930s the Canadian financial system operated through a network of private banks and within this network a system for clearing cheques was developed During this time it was the larger commercial banks that dealt with the governments business With the start of the Depression Canada was in need of a direct means for the country to settle international accounts In 1933 RB Bennet head of the Conservative party and Prime Minister at the time set up a Royal Commission to investigate the banking and monetary system and to consider the idea of creating a Canadian central bank Lord MacMillian chairman of the Royal Commission recommended that the central bank be established even though it was opposed by the chartered banks This opposition from the chartered banks was based on their reluctance to give up their own note-issuing power which for them was a source of both profit and
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