MGEA06H3 Study Guide - Final Guide: Bank Reserves, Demand Deposit, Excess Reserves

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MGEA06H3 Full Course Notes
MGEA06H3 Full Course Notes
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Commercial bank vs. central banks: there are two types of banks: commercial banks and central bank. Central bank the bank of canada (boc: the boc was established in 1935 and became a crown corporation in 1938, in practice, the operation of the boc is independent of the. The interest rate that the boc charged is called the bank rate: banker to the canadian government: the boc manages government banks accounts, foreign exchange reserves, and national debt. The balance sheet of a commercial bank: the balance sheet of a (commercial) bank: Note: cash & reserves cash held by the commercial bank. The bank keeps sufficient cash on hand so that it is able to meet depositor"s day-to-day cash withdrawals. The reserve ratio (rr: the reserve ratio refers to the fraction of its deposits that a commercial bank holds as cash & reserves. reserves. Commercial/chartered banks and money creation: examines how commercial/chartered banks help to create money.

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