Mortgage calculator with TD Bank and average home costs in Brighton Ontario.
Mortgages: Bulls, Bears and Banks
Money: Any object generally accepted by people as a payment for goods and services.
M-1: Only the most liquid forms of money (currency and demand deposits).
Currency: Paper money and coins issued by the government.
Cheque: An order instructing the bank to pay a given person or firm in a specified amount.
M-2: Everything in M-1 Plus saving deposits, time deposits, and money market mutual funds.
Time deposit: A deposit that requires prior notice to make a withdrawal; cannot be transferred to others by cheque.
Money Market mutual funds: Funds operated by investment companies that bring together pools of assets from many investors to buy short-term, low risk financial securities.
Chartered Bank: A privately owned, profit seeking firm that serves individuals, non-business organizations, and businesses as a financial intermediary.
Debit Card: Plastic Card that allows an individual to transfer money between accounts.
Smart Card: Credit-Card sized plastic card with an embedded computer chip that can be loaded with “electronic money.”
Prime Rate of interest: The lowest rate charged to borrowers.
Bank of Canada: Canada’s central bank; formed in 1935.
Bank Rate (rediscount rate) : The rate at which chartered banks can borrow from the bank of Canada.
Trust Company: Safeguards funds and estates entrusted to it: may also serve as a trustee, transfer agent, and registrar for corporations.
Credit Unions (Caisses populaires) : Cooperative savings and lending association formed by a group with common interests.
What changes are shifting banks away from their historical role?
Deregulation – Canadian banks have shifted from the traditional intermediaries roles between depositors and borrowers. They also are empowered to provide more financial services to clients.
Does Canada need diversified banks? Or could we function with just Chartered banks?
With the current setup of diversified banking in Canada our banks are able to outperform other global banks with efficiency and ROE.