Bank of Canada The Bank of Canada is the Canadian central bank. The Bank of Canada was created in 1934 with the Bank of Canada Act. The Bank of Canada head office is located in Ottawa, Ontario. The Bank of Canada is the only issuer of banknotes in Canada. Holding a monopoly on the printing and issuing of the Canadian banknotes, the Bank of Canada directly influences the value of the country’s currency and its main mandate is to promote the country’s financial and economic well-being. Born during the Great Depression out of the Bank of Canada Act of 1934 (the law which gave it its monopoly), the bank once determined the mandatory amount of reserved notes that each chartered bank was expected to keep but lost that power during the 1990s as its definition (and to some extent, its power) narrowed. Prior to its establishment in 1934, it was widely held that there was no need for a central bank however, the changing political climate of the early 1930s, increasing criticism of the country’s financial landscape and a progressing depression led to the re-examination of Canada’s 100 year old banking system (with a few banks with multiple branches) which betrayed the British influence on the underdeveloped banking sector. The bank became a publically owned entity in 1938 through an amendment to the act and has been amended many times since its inception. Before 1934 Canada didn’t have a central bank and each of the big banks issued their own banknotes. At that time the Bank of Montreal, which was the biggest bank, acted as a central bank. The Bank of Canada opened for business in 1935 and was a private owned corporation, but 3 years later it became Crown Corporation, owned by the government. By the end of 1949 the private banks were not allowed to issue their own banknotes and the Bank of Canada became the only issuer of banknotes. Once responsible for currency security, efficiently managing government funds and the public debt as well as keeping inflation low and stable, the Bank of Canada now focuses on keeping inflation rates between 1% and 3% through its power to determine the interest rate paid on borrowed money. It is however noted that it is not so much the parliamentary mandate that has changed but the actual practice of the institution. Market supply and demand for the Canadian dollar is now the determining factor for the country’s currency value since 1998 with the bank rarely interfering in affaires surrounding foreign exchange market. As a service, exchange rates and interest rates can be ascertained from the bank’s Public Information Office. The bank has five main responsibilities: 1)Monetary Policy: this deals with keeping inflation low and stable. It aims to keep the rate predictable as well. All of this is done in an effort to raise the standard of living for Canadians and help secure the economy’s solid performance. The bank's policy-making body is the Governing Council which consists of the Governor, Senior Deputy Governor and Deputy Governors (four). 2)Currency: both designing and issuing bank notes. 3)Financial System: this involves the promotion of financial systems that are efficient, safe and sound within the country as well as globally. 4)Funds Management: here the bank aims to provide effective, efficient and high-quality funds-management along with central banking services not just for the bank and federal government but also its other clients. 5)Corporate Administration: the corporate administration has a mandate to support sound information, physical, human, technological and financial resources management and all infrastructures relating to these. The bank seeks to achieve this aim through the corporate policies it develops and by maintaining integrated practices and systems that are cost-effective. The Governor of the Bank of Canada is the chief executive officer of the bank. The Governor of the Bank of Canada is appointed for 7 years by the Bank's Board of Directors and cannot be discharged by the Government of Canada, thus making the bank an independent institution.