Money in Canada
The monetary system and financial institutions are the backbone of any country's economic welfare. The first bank established in Canada was a very small one that was operated by a group of merchants in Montreal. Canada did not have a full-fledged federal bank until after the Great Depression of the 1930s, leaving the large private banks to handle financial matters. These banks issued their own currency, and because of their autonomy there was no useful regulation.
The Bank of Canada Act was passed in 1935, establishing Canada's federal bank. It started out as a private bank but by 1938 it was placed under the Crown and the regulation of the federal government. After this transition, all the private banks had to withdraw their own individual currencies under a strict timeline.
The Office of the Superintendent of Financial Institutions regulates and supervises Canada's banks that are federally regulated, its insurance companies, and its pension plans. It makes certain that financial entities are in compliance with existing laws, and develops and implements guidelines for risk management. An actuary is someone who understands the intricacies of risk. The actuary for Canada is in the Office of the Chief Actuary, found within the OSFI.
The Bank of Canada is responsible for keeping inflation low. It does this by regulating interest rates – raising them when inflation rises and lowering them when inflation drops. This goes a long way toward keeping the economy stable.
The Bank of Canada issues money, the symbols of the country's banked wealth. The paper currency of Canada usually carries a portrait of the British monarch or other royals, or former prime ministers. Paper currency is printed by either The Canadian Bank Note Company or BA International Inc. Coins are minted at the Royal Canadian Mint, located in Winnipeg, Manitoba. The one-dollar coin is affectionately called a loonie, while the two-dollar coin is a toonie.
With over 8,000 branches and approximately 18,000 ABM terminals in Canada, banking is convenient and safe. So safe, in fact, that the World Economic Forum named Canada the second in the world in soundness. Canada's major banks are:
- Royal Bank of Canada (RBC)
- Toronto-Dominion Bank (TD Canada Trust)
- Bank of Nova Scotia (Scotiabank)
- Bank of Montreal (BMO)
- Canadian Imperial Bank of Commerce (CIBC)
- National Bank of Canada
In addition to these top banks are many smaller banks including the well-known Canadian Tire Financial Services.
