RSM230H1 Lecture 2: Week 2
8 Mar 2017
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Document Summary
Boc: currency (deposit receipt and might be transferable, can be used to settle transactions) Boc board of directors: 12, appointed by governor in council, and non-voting minister of. Currency is a liability of the boc: it is a promise of the boc to pay. Most countries have moved to a at monetary system because the token itself does not have to worth anything, just serve as a symbol of value. Fiat money advantage: hard to make copy of. Fiat money problems: government may oversupply it while commodity has no such problem (gold) Commodity problems: stable amount of transaction, people and gold is hard. Seigniorage: the difference between the interest earned on holding government securities and the cost of issuing and distributing notes and coins: payments (easy to net out transactions) The system operated by the canadian payments association (cpa) Non-pro t organization that owns and operates two payment systems. Allows members to settle a mounts they owe each other.
