ECON 1010 Chapter Notes - Chapter 24: Open Market Operation, Bank Reserves, Monetary Base
Document Summary
Deposits: liquid assets: not money, cheques, credit cards, the banking system consists of, depository institutes. Credit unions and caisses populaires: cooperative organization that operates under cca act. Restricted list of customer: other financial institutions. Accepts deposits and keeps reserves for financial institutions: lender of last resort. It stands ready to make loans when the banking system as a whole is short of reserves. If some banks are short while others are at a surplus, the overnight loan market moves resources from one bank to another: sole issuer of bank notes. Only bank permitted to issue notes and have a monopoly in this activity: balance sheet: Bofc influences the economy by changing interest rate. Bank of canada"s assets: government securities, loans to depository institutions (usually small or zero) Bank of canada"s liabilities: bank of canada notes, depository institution deposits. Monetary base: bofc"s liabilities together with coins issued by the mint make up the monetary base.
