Canadian Banking System Overview

Overview of Canadian Banks

• Over 30 domestic Schedule I banks operate in Canada.
• Canada’s Big Six Banks: Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), National Bank of Canada, Royal Bank of Canada (RBC), Scotiabank, and Toronto-Dominion Bank (TD Bank Group).
• Big Six banks have extensive branch and ATM networks, centralizing most Canadians' savings.

Ownership Regulations

• Voting shares of large Schedule I banks must be widely held; no single shareholder or group can control more than 20%.
• Medium-sized banks (equity of $2 billion to $12 billion) can have one shareholder owning up to 65%, but 35% must be publicly traded.
• Small banks (equity less than $2 billion) can be fully owned by a single individual or organization.

Banking Products and Services

• Canadian banks provide a wide range of consumer and commercial services, including mortgages, loans, investment accounts, and financial planning.
• Savings deposits are insured by the Canada Deposit Insurance Corporation (CDIC).
• Banks may offer services through subsidiaries, including investment dealer activities and insurance products.

Credit Unions and Caisses Populaires

• Credit unions offer various services such as deposit-taking, loans, mortgages, and mutual funds.
• They cater to members from common interest groups, restricted by the Cooperative Credit Associations Act (CCAA).
• Must adhere to investment rules based on a prudent portfolio approach, restricting large investments outside authorized entities.

Trust and Loan Companies

• Federally and provincially incorporated trust companies are authorized to conduct trust business.
• They offer services similar to those of chartered banks, including savings accounts, personal loans, and estate planning.

Insurance Companies

• Insurance industry operates primarily in two main lines of business.

Cryptocurrency and Bitcoin

• Cryptoassets are digital assets using cryptography, functioning without intermediaries.
• Bitcoin, a prominent cryptocurrency, was created as an alternative payment system during financial instability in 2008.
• Bitcoin utilizes blockchain technology—a decentralized public ledger to record transactions.

Characteristics of Capital

• Capital has three key attributes: mobility, sensitivity to its environment, and scarcity, influencing its settling location.
• Favorable investing conditions include stable governance, reasonable regulation, and profitable opportunities.

Country Risk Evaluation Factors

• Political environment: assess potential internal or external conflicts.
• Economic trends: analyze growth in GDP, inflation, and economic activity.

Key Regulatory Terms

• Recognize important regulatory terms such as arbitration, investment representative, and risk capacity defined within the Canadian financial regulatory framework.
• Regulators aim to protect investors and maintain market integrity through established rules.

Test your knowledge about Canada's banking landscape with a focus on the Big Six banks. This quiz covers key facts and figures related to the major players in the Canadian banking industry. Explore how these banks compare to other financial institutions in Canada.