Canadian Banking

Canadian Banking History

Canada’s first bank was opened in 1817 by a small group of merchants in Montréal. Since then the Canadian banking industry has become a major contributor to economic development and job creation, and plays a vital role in supporting the growth of the new economy through significant investments in technology, innovation and the financing of new economy companies.

Up to the middle of the 20th century, the primary function of a bank was to accept deposits and grant commercial loans. In recent years the Canadian banking industry has undergone a dramatic transformation. Growth in business and changing customer needs, along with the rapid expansion of international trade, led to the introduction of more automation and new products and services. At the same time, Canadian banks started to face increased competition from other financial institutions, and revisions to Canada’s Bank Act in 1954 and 1967 enabled banks to offer new services such as mortgages and consumer loans. Subsequent changes to financial institutions legislation in 1987 and major revisions to the Bank Act in 1992 also increased competition by permitting Canadian banks to operate trust and securities subsidiaries.

Canadian Banking - Today

The Canadian banking system today is mature, sophisticated and highly competitive. Canadian banks derive stability from their broad diversification in Canada and the U.S. and a strong consumer credit culture. They have also developed a dominant wealth management business, and have a world-leading infrastructure with a high degree of automation and strong management control systems.

Under the Bank Act, the federal government is responsible for the regulation of the Canadian banking industry. However, given the hybrid nature of Canadian banking activities, some of their subsidiary activities such as trustee services and securities dealing are provincially regulated.

The Canada Deposit Insurance Corporation protects depositors by providing deposit insurance. To encourage well-managed member institutions within the Canadian banking industry, it also promotes standards of sound business and financial practices.

Canadian Banking - Into the Future

Today’s financial world is rapidly changing. Technology and global competition are significantly altering the structure of the Canadian banking industry. Canadian banks are facing increased competition from other established financial service providers and new foreign entrants. New technology and the Internet are also enabling competitors to enter the market without having to invest in branches, which presents further challenges to the Canadian banking industry.

The following is a list of Canadian banks registered to do business in Canada:

1. Amicus Bank
2. Bank of Montreal
3. The Bank of Nova Scotia
4. Canadian Imperial Bank of Commerce
5. Canadian Western Bank
6. Citizens Bank of Canada
7. CS Alterna Bank
8. First Nations Bank of Canada
9. Laurentian Bank of Canada
10. Manulife Bank of Canada
11. National Bank of Canada
12. Royal Bank of Canada
13. The Toronto-Dominion Bank