| Banking In Canada |
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The first Canadian bank - the Bank of Montreal was established in 1817, and this marked the beginning of the modern Canadian banking system. In the following years many new financial institutions opened for business. These new banks were issuing their own banknotes. The amendment done to the British North America Act in 1866, allowed both provincial and local governments to issue notes. The banknotes issued by the private Canadian banks were phased out, once the Canadian dollar was introduced in 1871. In 1935 the Canada established its own central bank, the Bank of Canada.
The first Canadian bank - the Bank of Montreal was established in 1817, and this marked the beginning of the modern Canadian banking system. In the following years many new financial institutions opened for business. These new banks were issuing their own banknotes. The amendment done to the British North America Act in 1866, allowed both provincial and local governments to issue notes. The banknotes issued by the private Canadian banks were phased out, once the Canadian dollar was introduced in 1871. In 1935 the Canada established its own central bank, the Bank of Canada. There are 5 big banks in Canada, and they are Royal Bank of Canada, CIBC, Bank of Montreal, Scotiabank and TD Bank. They are frequently referred to as "The Big Five". There are also many other smaller banks, credit unions and financial institutions. The big Canadian banks are truly international banks, having branches in various locations around the world. There are two primary regulators of the Canadian banking system: the Financial Consumer Agency of Canada, dealing with consumer issues, and the Office of the Superintendent of Financial Issues which focuses mainly on regulation. The Bank Act of Canada is reviewed every five years to make sure that the regulatory system is updated with regard to changes in the banking industry. In an effort to deal with the global financial crisis, the government began to monitor closely the banks' capital. The banks had to raise capital in case that their capital was below the stipulated capital requirements. Furthermore, various international organizations, among which the International Monetary Fund, consider that Canada has a sound and well functioning regulatory system. There is a good reason why the Canadian banking system is the envy of the world. Unlike many other nations, notably US, Canada didn't have to bail out its banks. When compared to their European and US counterparts, Canadian banks look much better. Take TD Financial Group (known simply as TD bank) for example. The bank conglomerate was ranking 15th amongst the top North American banks in 2007, and a year later was already at #5 spot. Scotibank has made several acquisitions in the last few years. In 2007 they bought the Chilean Banco de Desarollo. Later in 2009 Scotiabank purchased E*Trade Financial Group and Five Continents Financial Ltd. The majority of Canadians consider that good management is in place with regard to their banking system. They are confident that deposits are kept safe and make use of reasonably priced credit options. The stability of the Canadian banking system is even more evident when supported by numbers. Banks have contributed to the overall economic stability by employing more than 260 thousand Canadians, while securing financing to 1.2 million medium and small-sized business entities and donating $197 million for charitable projects. Furthermore in 2009, the banking system had contributed about 3 percent to the country's GDP. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Need to calculate your loan payments, then visit www.canadabanks.net and use one of their financial calculators. |