How does the Bank of Canada work? Find out its secrets on the foreign exchange

Do you want to know how the Bank of Canada works? Watch our latest video to learn about the Bank of Canada’s structure, foreign exchange policy, rates, and much more

How the Bank of Canada works – all you need to know

The next Central Bank that we will be looking at, is the Bank of Canada. And although the Bank of Canada is run through the Canadian Government, it is a bank that’s ultimately owned by its people. And, in response to the public criticism of how the banks in Canada, and how they, in particular, responded to the Great Depression of the 1930s, the bank was formally formed in 1934, as a private corporation. However, within about 4 years, it became a crown corporation and was taken over by the Government. However, unlike other Government Agencies, the bank’s governor and senior governor are appointed by the bank itself and not by the Government. The Bank of Canada was built and has remained in Ottawa since its opening, and as a non-commercial bank, it doesn’t offer banking services, such as checking or savings accounts to normal customers. However, it does still contribute around an average of 1.7 billion US dollars in profit, each year, to the Canadian Government. Its principal role is to promote the economic and financial welfare of Canada and the four main areas of responsibility for the Bank of Canada are its monetary policy, the financial system of Canada, its currency, nicknamed the loonie, and managing its funds.

The Bank of Canada has the following structure, in that monetary policy decisions are made by a majority vote by the governing council, and that consists of a governor, the senior deputy governor, and then, four deputy governors. They have an inflation target between 1 and 3%, and they meet about 8 times a year. Again, like many Central Banks these days, they have a website and you can go to the website here, www.bankofcanada.ca and when you go to that website, what you can see is, you can see press releases and on the press release, you can go to press, have a good explore. Sorry. Hit the press tab, apologies for this. There we go. And you can go to interview speeches, webcasts. Now, at the moment, I’m just waiting on a webcast from the senior governor, Stephen Poloz, and he is going to be speaking in about 9-10 minutes and I can just go to the webcast there, and I can click on the link there and I can see Poloz’s speech and many traders around the world are looking and signing into the central banks websites in order to get hints and clues as to the future direction for a country’s currency.

So, that’s the bank of Canada, folks. I hope that’s been another helpful video for you in the Central Bank series.