The Bank of Canada:
An Overview
By Jock Finlayson
C
entral banks and those who lead them have been
in the spotlight in recent years, and it is not hard to
understand why. From the onset of the global financial
crisis and recession in 2008 through to the present, the
policies and actions of central banks have attracted
unprecedented attention from the media, the business
community, participants in the financial markets, and the
public.
Across the world’s advanced economies, the past six years
have been a time of record-low borrowing costs, belowtrend inflation rates, sluggish economic growth, and
steeply rising asset values from the low points reached
in mid-2009. Central bank policy – the management
of interest rates to support stable prices and a wellfunctioning financial system – has played a critical role
in creating the macroeconomic environment in which
Canada and other industrialized countries have been
operating over the past few years.
Canada escaped the worst of the 2008 global financial
crisis. The country did not experience a collapse in housing
prices or a drying up of mortgage credit, the government
did not have to bail out the banking industry, and
Canadian households – unlike their American counterparts
– did not suffer a severe, lasting drop in net worth. Once
the economy began to rec