The First World War had a profound impact on the strengthening of commercial banks, and after it more quickly develop non-bank institutions: the sales finance company and consumer credit, insurance and trust companies. The world economic crisis of the 1930s. negative impact on the credit system, to commercial banks, in particular, and other lending institutions.
During this period, the Bank of Canada is created, increasing government intervention in the credit system, activates the activities of the specialized state institutions lending tion of housing construction and agriculture. Improving credit system continued during the Second World War and after it, there are new types of specialized credit institutions: the leasing companies, state-owned insurance companies, pension schemes.
A modern credit system in Canada includes: the central bank of issue, commercial banks, specialized agencies. The central bank of issue - The Bank of Canada - a single. A small number of commercial banks, in the provinces of operating credit institutions provincial level. The credit system of the country is characterized by the following key financial institutions: commercial, trust and mortgage banks, insurance and investment companies.
Private for-profit, or the so-called chartered banks have complete freedom in commercial activities. It is governed by parliamentary charters. Chartered banks in purpose designed to serve industrial, commercial and public sectors of the economy. They carry out deposit transactions, provide various kinds of loans, engaged in foreign exchange transactions.
Canadian Bankers Association, which is the highest body of the executive board, is in charge of the clearing system in Canada. Directly leading a settlement system between banks so-called Committee for clearing and information centers. He has 10 organized their regional clearing houses, known as clearing centers.
Regional clearing houses exist in Ottawa, Calgary, Halifax, Montreal, Quebec, Regina, Saint John, Toronto, Vancouver and Winnipeg. Their activities directly managed by local clearing association under the mandates received from the Canadian Bankers Association.
In the credit system, there are other institutions, or, as they call them in the country, "non-bank financial intermediaries bearings" (NBFP). They also carry out banking operations. This category includes credit unions and co-operative. Financial institutions serving mainly French-speaking population.
NBFP is mixed. In addition to these they include independent trust banks and trust departments of commercial banks. As in other major capitalist countries, Canada developed insurance business.
The country has a sufficiently high degree of concentration of the insurance capital. In the local insurance market is quite firmly established U. S. companies, of 172 foreign firms operating in Canada, 134 - from the United States. In turn, the U. S. market is the main area of the external expansion of Canadian insurers.
The USA has 71 Canadian insurance company (in the UK - 7, Hong Kong - 6). The Central Bank of Canada (BoC) Bank of Canada - the central bank of issue of the country. It was established as a joint stock company, but the holders of its shares could not be commercial banks and their employees, as well as foreigners. The Government of Canada for the years 1935-1938. bought from private owners of their shares, thereby strengthening the central bank.
Its activity determines the federal government, which appoints the Board of Directors. The Board of Directors consists of the Deputy Minister of Finance. The Bank of Canada regularly reports to Parliament on its activities.
The main functions of the Bank of Canada are: the regulation of money and credit, and maintaining the national currency against other currencies; mobilization of the price level, the level of production and trade. The Bank of Canada has been issuing banknotes in circulation, provides advances to commercial banks, manages the cash reserves of commercial banks, regulates transactions between banks for clearing accounts, regulates the state's gold reserves. The Bank of Canada is an agent of the federal government manages the securities of the state, its cash balance, provides communication with the central banks of other countries. The Bank of Canada is buying shares of commercial banks, not credit and accept deposits from individuals and companies.