FLC: Banking Flashcards
Legal Tender in Canada
Bank Notes
The instrument used by the Bank of Canada to control the money supply, the bank rate is also known as…
Prime Lending Rate
What is the overnight lending rate
The interest rate at which major financial institutions borrow and lend overnight (one day) funds among themselves
What is the bank’s key interest rate/key policy rate?
The target the Bank sets for the overnight lending rate. Changes in this target rate can affect other interest rates, and the exchange rate of the Canadian dollar.
Temporary loan from a financial institution, due to a cheque written for more money than what is in your bank account.
Overdraft
Bank of Canada’s 4 main responsibilities
- MONETARY POLICY (control inflation by adjusting the interest rate)
- CURRENCY (design, produce, and distribute)
- promote stable and efficient FINANCIAL SYSTEMS in Canada and the world
- FUNDS MANAGEMENT (for Canadian gov)
Another name for the Bank of Canada
Central Bank of Canada
the Bank of Canada helps to control what 2 things?
money supply and interest rate
What is a stale dated cheque?
More than 6 months old, so can no longer be cashed
What is a PIN?
Personal Identification Number - a confidential electronic signature
What is the CDIC?
Canada Deposit Insurance Corporation - insures Canadian deposits in Canadian banks for up to $100, 000 in case of bank failure.
Who is Jim Flaherty, and who is the current person
Former Federal Minister of Finance. Current is Bill Morneau
Who is Stephen S. Poloz?
Current Governor of Bank of Canada
How does the Bank of Canada maintain the value of our dollar?
They increase and decrease our money supply through foreign exchange
What is line of credit?
the amount of credit extended to the borrower. It is great for emergencies, pre-arranged with the bank, and only requires payments on a monthly basis.
Material of our new bank notes
Synthetic Polymer
Which two cities does the Royal Canadian Mint have production operations in?
Winnipeg and Ottawa
What is a schedule 2 bank? Ex.?
Foreign bank subsidaries that are authorized under the Bank Act to accept deposits. Ex. ING Bank of Canada
What is reconciling
The process of making sure that an individual balance in a transaction register agrees with the info provided on a bank statement.
Why are banks critical to the economy?
they put customers’ money to use by lending it out to others.
How do banks make money?
fees for services and from the interest they charge on loans (they charge more than they need to pay).
Who is primarily responsible for protecting the public from unsafe banking practices?
The agency that charters the bank. They conduct on-site examination.
