The Bank of Canada (BOC) is Canada's central bank and was established in 1934 under the Bank of Canada Act. The Act stated that the Bank of Canada was created “to promote the economic and financial welfare of Canada.” The BOC and its Governor are responsible for setting monetary policies, printing money, and determining the Canadian banks' interest rates.
In this Wiki, we will explore the Bank of Canada, its structure, monetary policy and more.
Canada – The Bank of Canada (BOC)
BOC Structure
The Bank of Canada has a similar structure to most of the other central banks. Monetary policy within the BOC is made by a consensus vote by a governing council that consists of the BOC governor, the senior deputy governor, and 4 deputy governors.
The BOC meets 8 times per year. It’s very rare that they would call a non-scheduled meeting unless there was a major concern in the financial markets. However, they did do this quite a lot in the Great Financial Crisis that kicked off in 2007. But these were extraordinary times that called for extraordinary action.
BOC Monetary Policy Mandates
Canada's monetary policy framework consists of two key components that work together:
- The inflation control target and
- The flexible exchange rate.
This makes their mandate to preserve the value of the currency by maintaining an inflation target between 1% and 3%.