EC140 Lecture Notes - Lecture 14: Federal Reserve System, European Central Bank, Commercial Bank
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EC140 Full Course Notes
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Document Summary
Money as a unit of account account. Most money is now held electronically through banks. A store of value: debit cards and/or cheques, identical to physical money, but less likely to be lost, no difference. Central bank bank of canada: government owned, conducts monetary policy for the government, sole money-issuing authority, regulate banking activity in canada. Commercial bank serve the general public: chartered banks, trust companies, credit unions, etc, act between savers and borrowers. U. s. federal reserve system, bank of england, european central bank, etf. Bank of canada starts in 1935, u. s. federal reserve system in 1913. Government owned, operates independently, unless the government wants control (joint responsibility) Accepts deposits from the government and commercial banks and transfers funds between them. Supports the financial markets: printing money increases bank liabilities, sets the rules by which banks operate in canada, lender of last resort, works with banks to eliminate bank runs, respond to banking shocks.