Bank of Canada

The Bank of Canada was established in 1934 as the central bank of Canada, and controls all issuance of banknotes in the nation. The bank is headquartered in Ottawa, Canada, and is directly responsible for stabilizing inflation, securing and issuing the Canadian currency, maintaining overall financial stability, and managing public debt and government funds. Bank of Canada has regional offices in Calgary, Montreal, Halifax, Toronto and Vancouver. Rather than providing personal or business banking products and services, the Bank of Canada acts as an extended branch of the government by providing mandated solutions to corporate and organizational financial institutions. The following informatics outlines the main duties and roles of the Bank of Canada, as well as historical and corporate facts about the bank.

Issuing, Designing and Distributing Currency
Aside from issuing Canadian bank notes, Bank of Canada is also responsible for designing and approving the design of bank notes, a process which can take several years for each note. After the notes are printed, the bank has to ensure that each financial institution in Canada is supplied enough bank notes to satisfy the public demand. The notes are distributed to banks through Canada's Bank Note Distribution System. So far, the Bank of Canad has issued 6 series of bank notes, and 2 commemorative notes. The fronts of the notes typically show portraits of former prime ministers, while the backs display figures, landscapes, animals, achievements and other important aspects of Canadian history.

Maintaining the Monetary Policy
The Bank of Canada is also responsible for maintaining the monetary policy of the country, which dictates how much money is worth, as well as how much is circulating in the economy at any given point in time. The main aspect of the monetary policy is the inflation control system, which aims to keep inflation between 1 and 3 percent consistently. Inflation is controlled by the bank through the adjustment of short-term interest rates, which indirectly affects the economy because of the impact on banks and financial institutions. When inflation begins to rise sharply or significantly, even it is not yet out of the aforementioned 1%-3% target range, the Bank of Canada will raise interest rates in order to 'cool off' the economy. Likewise, when inflation percentages drop, the bank will drop interest rates to encourage economic growth. Overall, the goal of the monetary policy is to maintain a productive and stable economy by controlling inflation and influencing economic growth.

Government Funds and Foreign Exchange
The Bank of Canada is considered to be the fiscal agent for the government, being responsible for the management of public funds. Nearly all money pent and collected by the government goes through the accounts of the Receiver General, which is managed by the Bank of Canada. The Bank must ensure that these accounts have enough funds to satisfy the investment and expenditure requirements of the government. The bank also manages the nation's foreign exchange reserves, which provide liquidity for the Canadian government and promote the stability of the Canadian dollar foreign exchange market.

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