EC223 Lecture Notes - Lecture 15: Money Supply, Business Cycle, Deflation

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Ch. 15 central banks and the bank of canada. The bank of canada was created by the bank of canada act in 1934 and started operations in 1935. Overall responsibility for the operation of the bank of canada rests with a board of. Governing council assume responsibility for the bank"s quarterly monetary policy report. Before the creation of the bofc the federal government and the early banks issued notes designed to circulate as currency. The bofc conducts ongoing research to improve cost effectiveness, reduce counterfeiting: funds management. The bofc provides debt management service for the government: advising on borrowings, managing new debt offerings, servicing outstanding debt. They also manage the government"s foreign exchange reserves. Engage in international finance transactions: financial system. Bofc serves as a lender of last resort if banks face liquidity crisis. If banks asset value is less than liability value, then bofc would consider lending as last resort.

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