The Bank of Canada (BoC) is the central bank of Canada. It is situated in Ottawa, the capital of Canada.
The central bank of Canada was established in 1934 and in March 1935 it became operational. In 1938, it became a Crown corporation belonging to the federal government.

The principal role of the BOC defined in Bank of Canada Act is “to promote the economic and financial welfare of Canada,”
The Bank of Canada Act undergone various amendments with the passage of time, but the preamble to the Act has not changed.
Till Now the bank is functioning “to regulate credit and currency in the best interests of the economic life of the nation.”
The bank of Canada has four key responsibilities:

1. Monetary policy:  The monetary policy is used by BOC to influence the supply of money circulating in the economy frameworks for low and stable inflation.
2. Financial system: The financial system provided by the bank is safe, sound and efficient in Canada and internationally as well. For this, the bank offers easy transactions in the financial markets.
3. Currency: The bank notes in Canada are designed, issued and distributed by BOC
4. Funds management: The BOC acts as the “fiscal agent” for the Government of Canada, managing its public debt programs and foreign exchange reserves.

The bank has a more narrow and specific internal definition of that mandate to maintain the inflation rate between 1% to 3% (as per Consumer Price Index measurement)
The bank applies interest rate for debts which is actually a vital tool for Bank of Canada.
The huge trade between Canada and the United States, specific adjustments to interest rates are often affected by those in the US at the time.
The Bank of Canada is has the strong authority to issue currency in the form of banknotes in Canada.
The coins are not issued by the bank; they are issued by the Royal Canadian Mint.
Canada no longer requires banks to maintain fractional reserves with the Bank of Canada.
Instead, banks are required to hold highly liquid assets such as treasury bills equal to 30 days of normal withdrawals (liquidity coverage), while leverage is primarily tied to adequate loss-absorbing capital, mainly Tier1 (equity) capital.
The Bank of Canada is an ultimate ownership of Canadian public although it is run through the Canadian government. The bank was formed in 1934 as a private corporation, but within four years it became a Crown corporation and was taken over by the government.
The bank itself hires the governor and senior governor.

Who Runs the Bank?

Governing Council




The Governing Council is the policy maker and runner of the Bank of Canada.
The governing council:



• Conducts the monetary policy
• Promotes and safe and efficient financial system



The organizational body of the bank comprises of the Governor, the Senior Deputy Governor, and four Deputy Governors.
The target for the overnight rate also called key policy rate is the main tool for the conduction of monetary policy and this rate is announced on eight fixed dates annually.
The governing council decides the rate by itself without individual voting like other central banks.




Executive Council




The Executive Council of the bank consists of Chief Operating Officer and the Governing Council. Their main aim is to decide the strategic direction of the bank.




The Governor




The Governor is the Chief Executive of the bank and fully controls the business of the bank.
The major responsibilities of the Governor are:



• Chairing the Board of Director
• Supervising the Governing Council of the bank
• Conducts the monetary policy to achieve an inflation target under the discussion with Bank and Government of Canada



The independent directors appoint the Governor and Deputy Governor for a fixed tenure of 7 years with an official approval of the Governor Council functioning under the federal cabinet.
In this way, the Governor becomes capable to adopt the medium and long term perspective to design an effective monetary policy.




The Senior Deputy Governor




The Senior Governor is the deputy executive of the Bank of Canada.
The key responsibilities of the Senior Deputy Governor are:



• To head the strategic planning and operations of the BOC
• Works as Governing Council member of the bank to design the monetary policy
• Also a member of Board of Directors of Bank of Canada.



The Board of Directors 




The Finance Minister appoints the Board of Directors with the approval of the Governor Council for the time period of three years.
The Board of Directors consists of the Governor, the Senior Deputy Governor, 12 outside directors, and the Deputy Minister of Finance (who has no vote).
Their key responsibilities are:



• providing general oversight of the management and administration of the Bank
• reviewing the Bank’s general policies (on matters other than monetary policy and for approving the Bank’s corporate objectives, plans, and annual budget)
• keeping the Bank informed about prevailing economic conditions in their respective regions
• appointing the Governor and Senior Deputy Governor Monetary policy is neither formulated nor implemented by the outside directors.