Bank of Canada (BOC)
The Bank of Canada is the central bank of Canada. Initially setup as a private corporation by an act of Parliament in 1935, the Bank of Canada became an arm of the Canadian government in 1938. It is currently headed by Mark Carney (serving as its Governor since 2008). The BoC meets eight times a year, and has its corporate headquarters in Ontario, Canada.
Structure of the BoC
The Bank of Canada is described as a “Crown Corporation”, which is owned by the government but which operates independently of the Canadian government. The Bank of Canada has a Board of Directors made up of the Governor, the Senior Deputy Governor and 12 independent directors who have three-year terms. The appointment of the Governor and the Senior Deputy Governor is the responsibility of the Board. The Canadian Deputy Minister of Finance is an ex-officio member of the Board who has non-voting rights. There is a Governing Council which consists of the Governor, the Senior Deputy Governor and four Deputy Governors. The mandate of the BoC’s Governing Council is to make all decisions regarding monetary policy.
Functions of the BoC
The Bank of Canada has a primary mandate of keeping inflation within the 1-3% range, which it has been able to achieve. In addition, the Bank of Canada also functions as a lender of last resort as a means of stabilizing the banking system in Canada. The BoC is also tasked with the printing and distribution of the Canadian Dollar bank notes, as well as controlling the supply of the Canadian currency. It also holds the power to intervene in the currency market, but only under extreme circumstances.
The Bank of Canada is credited with maintaining the resilience of Canadian banks under the period of the global economic meltdown till date.