Canadian Maple Leaf Licensing Info: FSCO (Ontario) #11363,
and serving all other provinces.
 

GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
^
50% - Moderately

Central Bank


Synonyms:main bank
Filed Under: financial-banking, investments, mortgages
Tags: banking, investment, mortgage
 

Definition of central bank

central bank
1. A financial institution that is responsible for managing a nation's currency, money supply, and interest rates. Most central banks also oversee their nation's commercial banking system, while possessing a monopoly over a nation's monetary base. The central bank of Canada is the Bank of Canada. Also known as a "reserve bank," or "monetary authority."

Related Terms and Acronyms:

  • Canada Mortgage and Housing Corporation (CMHC)   The Canada Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital."
      ➥  Insures Canadian mortgage lenders.
  • commerce   The systems and activities that impact business and trade within a nation and abroad.
  • Finance Canada   Federal department responsible for Canada's economic performance and regulation of financial institutions.
  • fiscal policy   The use of government spending and taxation policies to influence the economy.
  • international banking   The operation of bank branches and subsidiaries located outside Canada. This area of banking also includes the supervision of correspondent banking relationships, foreign exchange trading, and trade finance.
  • large value transfer system (LVTS)   System being created by the Canadian Payments Association that will settle large value payments, possibly $50,000 and over, at the central bank on a same-day basis.
  • prime rate   The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.
  • regional bank   A bank with a primary market in a regional or metropolitan area but takes deposits from throughout the province in which it is located. Usually called a Credit Union in Canada.
  • schedule i banks   A designation in the Bank Act that refers to Canadian-owned banks that are widely held, i.e., ones in which no one owner holds more than 10% of shares.
  • schedule ii banks   A designation in the Bank Act that refers to foreign-owned banks and closely held Canadian banks, i.e., banks in which an owner may hold more than 10% of outstanding stock.

Search the Glossary

Canada's Top Mortgage Calculator
Try Canada's #1 calculator and see what kind of difference a low mortgage rate can make. A few percentage points can mean thousands in savings, it might just blow your mind.
#1 Mortgage Calculator
 
Mortgage Rates
Unlike the banks, you don't ever have to haggle with us over our rates. We will show you our best rates, right from the start. No fuss, no muss. Why don't you check out our mortgage rates right now?
Mortgage Rates
 
Mortgage Brokers
Using a mortgage broker will save you money — money you could be using on more important things like your children's education, saving for an early retirement, paying your bills or buying that awesome motorcycle your wife says is way too expensive.
Mortgage Brokers Save You Money