The financial system is vital to the functioning of the economy and the welfare of Canadians.
The system includes financial institutions such as banks and credit unions, the financial markets, and clearing and settlement systems. It’s through the financial system that most commercial activity (saving; borrowing; and investing, buying and selling by means of debit and credit cards, cheques and e-money) is carried out.
The Bank works with other agencies and market participants to promote and maintain the safe and efficient operation of the key elements of the financial system by.
- overseeing major clearing and settlement systems, also known as financial market infrastructures (FMIs)
- providing banking services to these systems and their participants
- working jointly with other domestic and international bodies involved in financial-stability issues
- providing liquidity to the system
- giving policy advice to the federal government on the design and development of the financial system
Oversight of Financial Market Infrastructures
Learn about the Bank’s role in overseeing financial market infrastructure (FMIs), its oversight responsibilities and powers under Canada’s Payment Clearing and Settlement Act, and which FMIs are considered systemically important.
Learn about Canada’s two major payments systems, and about how payments are cleared and settled. Read about the Canadian Payments Association, the owner and operator of Canada’s Large Value Transfer System (LVTS) and the Automated Clearing Settlement System (ACSS).
The Bank of Canada’s risk-management standards and their application to different types of designated financial market infrastructures (FMIs).
Here are the agencies and initiatives that help ensure the integrity and stability of the financial system and allow market participants to comply with mandated clearing requirements.
Provision of Liquidity to the Financial System
Learn about the Bank’s policies for financial market operations and tools for providing liquidity to the financial system. This includes routine and emergency liquidity tools provided as part of the Bank’s role as lender of last resort.
The Bank's Contributions to the International Financial System
In addition to promoting a sound financial system at home, the Bank contributes to international discussions on important financial system issues, collaborates with other central banks on research into the international financial system and provides technical assistance. The Bank of Canada:
- provides experienced personnel to take part in joint missions of the International Monetary Fund and the World Bank
- is a major participant in the Financial Stability Board, which was established to address vulnerabilities and to develop and implement strong regulatory, supervisory and other policies in the interest of financial stability
- contributes to Canada's participation in G20 discussions on global economic stability; and
- provides ongoing support for the work of committees and working groups of the Bank for International Settlements