Bank Of Canada (BOC)
What Is the Bank of Canada (BOC)?
The Bank of Canada (BOC) is Canada's central bank, and was laid out in 1934 under the Bank of Canada Act. The Act stated that the Bank of Canada was made "to advance the economic and financial welfare of Canada." The BOC and its Governor are responsible for setting monetary policies, printing money, and deciding the Canadian banks' interest rates.
The History of the Bank of Canada
The BOC has four primary areas of responsibility: monetary policy, which directs the supply of money circulating in the Canadian economy; currency, the design and giving of Canada's bank notes, and overseeing funds. The BOC deals with the Canadian government's public debt and reserves of foreign exchange.
Canada's former Prime Minister, William Lyon Mackenzie King, authoritatively marked the Bank of Canada Act into law. In 1938, the BOC was legally designated as a federal crown corporation. Prior to the marking the law, Canada's biggest bank, the Bank of Montreal, acted as the public authority's banker.
The BOC Governor is responsible for the vast majority of the bank's capabilities. The primary Governor, Graham F. Towers, served for a long time. The board-of-directors-chose BOC Governor serves seven-year terms. Lead representative Tiff Macklem has served beginning around 2020 and is the bank's tenth lead representative. The individuals from the board of directors are delegated by Canada's Governor-in-Council and serve for three-year terms.
The BOC and Interest Rates
Setting the interest rate is one of the BOC's most important jobs. Canada's monetary policy system is designed to keep inflation low and stable. The interest rate is chosen eight times every year. In 2007, the interest rate was above 4% before being lowered, more than time, to 1% in 2010. The rate was cut two times in 2015 to 0.5 percent. Beginning around 2015, this rate has increased three times to 1.25% as of April 2018 and 1.75% as of Jan. 2020. The rate as of Dec. 8, 2021 is 0.25%. This rate is the interest charged when banks loan money to one another. The BOC generally forces rate cuts to support the economy.
Different Functions of the BOC
Making the national currency for Canada is one more important task of the BOC. The lead representative's responsibility is to give money that is challenging to fake and has an authentication cycle in place. Canada contracts the printing of money to an outside printing company. The lead representative's mark is imprinted on all Canadian paper money.
The BOC's headquarters are 234 Wellington Street in the city of Ottawa. This is where the bank has operated starting around 1980 after a few movements. Regional Bank of Canada offices are in Vancouver, Calgary, Toronto, Montreal, and Halifax.
- The Bank of Canada (BOC) is Canada's central bank, and is situated in Ottawa, the capital of Canada.
- The BOC's command is to advance economic stability in Canada.
- As central bank, the BOC directs the country's monetary policy including setting interest rates and adjusting the money supply.