Canada's financial system consists of:
These include banks, credit unions, and similar organizations. The Bank of Canada routinely provides "liquidity" to financial institutions that are participants in the financial system; that is, it lends them money overnight to facilitate the settlement of payments systems. As the "lender of last resort," the Bank also provides emergency liquidity to eligible institutions that face significant funding problems.
Note that the Bank of Canada does not directly regulate these institutions or deal with consumer complaints regarding them. These are the roles of the Office of the Superintendent of Financial Institutions and Financial Consumer Agency of Canada.
These consist of markets for money, bonds, equities, derivatives, and foreign exchange. The Bank is closely involved with Canada's financial markets through its activities in the foreign exchange market, its marketing and management of government securities, and its influence on interest rates via the target for the overnight rate.
These are the systems through which funds flow from one account and financial institution to another; for instance, when a customer of one bank writes a cheque to a customer of another bank. The Bank of Canada oversees the most important of these systems, allowing the financial institutions that participate in them to engage safely and efficiently in large transactions.
A sound and efficient financial system is essential to a nation's economic growth. The Bank of Canada is one of several federal and provincial organizations in Canada that promote the safety and efficiency of our financial system.