Economics 1022A/B Lecture Notes - Lecture 30: Overnight Rate, Landing Vehicle Tracked, Financial Institution
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ECON 1022A/B Full Course Notes
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Goal is to protect value of canadian money. Involves the bank of canada changing interest rates to control inflation and stabilize the economy. Maintain the inflation between 1 and 3 % per year. Independent central bank: determines monetary policy with no government interference. Subordinate central bank: must follow government directions, but can still have significant power. Design, production, distribution and destruction of bank notes. Holds deposits of financial institutions at the bank rate: lender of last resort, overnight loans. Provides economic analysis to assist in determining policy. (cid:28630)(cid:28660)(cid:28671)(cid:28662)(cid:28680)(cid:28671)(cid:28660)(cid:28679)(cid:28664) (cid:28679)(cid:28667)(cid:28664) (cid:28663)(cid:28660)y"(cid:28678) (cid:28666)(cid:28677)(cid:28674)(cid:28678)(cid:28678) (cid:28674)(cid:28677) (cid:28673)(cid:28664)(cid:28679) (cid:28675)(cid:28674)(cid:28678)(cid:28668)(cid:28679)(cid:28668)(cid:28674)(cid:28673)(cid:28678) (cid:28665)(cid:28674)(cid:28677) (cid:28664)(cid:28660)(cid:28662)(cid:28667) (cid:28665)(cid:28668)(cid:28673)(cid:28660)(cid:28673)(cid:28662)(cid:28668)(cid:28660)(cid:28671) (cid:28668)(cid:28673)(cid:28678)(cid:28679)(cid:28668)(cid:28679)(cid:28680)(cid:28679)(cid:28668)(cid:28674)(cid:28673) Banks use funds on deposit with boc to fulfill obligations to other banks. Same procedure also used for securities derivatives, fx items. Boc is ultimate source of liquid funds in payments system. Lends money overnight (one night) to financial institutions unable to cover obligations on a given day.