ECON 319 Lecture Notes - Lecture 16: The Great-West Life Assurance Company, Trust Company, Manulife
9 Feb 2017
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Canadian banking considered best banking system in the world. 4 pillars of canadian banking: chartered banks, insurance companies, trust companies, securities dealers. Security dealers acted as intermediaries(market) for lenders(households) and borrowers(companies), and charged fees for brokerage: very short term deals. Insurance companies are long term, thus want long term assets, and are very heavily regulated. Trust companies make mortgages and fund them via guaranteed investment certificates and accept deposits: not heavil(cid:455) regulated (cid:271)e(cid:272)ause the(cid:455) do(cid:374)"t a(cid:272)t as a (cid:373)ediu(cid:373) of e(cid:454)(cid:272)ha(cid:374)ge. Charter banks are just regular banks that we know of. The last 3 generate income on a continuing basis. Depression of 1929 formed the regulation that divided these 4 pillars and kept them separate because it was believed a lack of professionalism by them, mostly securities, caused the great. In 1986, banks were allowed to buy security firms, then they bought all the trust companies.
