What does the Bank of Canada do?

The Bank has five main areas of responsibility that affect Canadians’ everyday lives.

Monetary policy

We set the policy interest rate to influence borrowing and spending, which stimulates or slows down the economy. By targeting inflation, we preserve the value of your money and keep inflation low, stable and predictable.

How does this affect you?

Monetary policy passes through the financial system and eventually affects the:

• interest rates that banks and other institutions charge you for your mortgage and other loans
• interest rates that banks and other institutions pay you on your deposits and other savings
• speed at which prices grow for the goods and services you pay for

Financial system

We work to support a stable and efficient financial system. The financial system includes:

• banks and insurance companies
• financial markets
• clearing and settlement systems

We can lend to these organizations if needed in an emergency. We do not regulate or oversee financial institutions, though—the Office of the Superintendent of Financial Institutions has that responsibility.

How does this affect you?

Our work in this area helps ensure you can rely on a safe and stable financial system. That helps your bank or financial institution provide you with the services you need—like getting your pay deposited into your account automatically or easily transferring money between accounts—without interruptions or delays.

Currency

We design Canada’s bank notes so that they are:

• durable—their polymer design makes them last much longer than paper bills
• accessible—each denomination ($5, $10, $20, $50, $100) is a different colour so that people can quickly and easily tell the difference, and notes also have accessibility features so that people with visual impairments can recognize and use them
• secure—with built-in features that are easy to check and hard to counterfeit
• distinctly Canadian—they reflect Canada and our country’s rich and unique culture, history, achievements and heritage

We distribute these bank notes to financial institutions and control the quality of notes in circulation.

How does this affect you?

Cash is still used every day to purchase goods and services. The bank notes in your wallet, pocket or piggy bank were designed, issued and distributed by the Bank of Canada. We also inspect bank notes circulating in the economy so that when you use them, they are not worn or damaged.

Funds management

We serve several clients in different ways:

• Government of Canada—we act as its banker and treasury manager, and we manage the government’s foreign exchange reserves
• some federal Crown corporations—we provide Canadian-dollar cash accounts and securities accounts
• other central banks and international financial organizations—we offer Canadian-dollar operating accounts and securities accounts, and we safeguard others’ gold
• financial market infrastructures and direct participants in Canada’s payment systems—we provide services that allow these organizations to conduct transactions with each other and with the Bank
• the Bank of Canada itself—we manage the assets and liabilities on our own balance sheet as well as the investments held by our pension fund

How does this affect you?

These activities help support a stable economy and financial system. The government, banks and other organizations can access the funds they need, and that means the financial programs and services that you rely on work well.

Retail payments supervision

We supervise payment service providers (PSPs)—individuals and entities that enable businesses to accept and process credit and debit card payments and other payment types. Our supervision supports a safe and reliable payment system in Canada.

The Bank:

• supervises PSPs to make sure they are complying with the Retail Payment Activities Act
• makes sure they meet the requirements to manage operational risk and safeguard end-users' funds
• monitors and evaluates trends and issues in the payment system

How does this affect you?

Well-regulated and efficient payment systems mean Canadians can expect their transactions to be secure. When you pay for that new t-shirt in the store, the transaction happens securely, and your money remains safe.