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Economics 120

Canadian Chartered Banks
   Chartered bank – term used to describe a
    financial institution operating under the
    authority of Parliament that accepts
    deposits and lends money to businesses,
    government, and households
Types of Deposits
 Chequing account – demand deposit (your
  money is available to you on demand).
  Often carries a monthly fee and pays a low
  (or no) rate of interest
 Savings account – higher rate of interest
  than the chequing account and is intended
  for short-term savings
Types of Deposits
   Term deposits – depositor leaves the money
    with the bank for a fixed amount of time. Range
    from 1 day to 5 years, minimum investment
    usually $1000
   Guaranteed investment certificates (GICs) –
    depositor leaves the money with the bank for a
    fixed term, minimum deposit is usually $5000,
    higher rate of interest than term deposits
Types of Deposits
   Mutual funds - professionally-managed
    form of collective investments that pools
    money from many investors and invests it
    in stocks, bonds, short-term money market
    instruments, and/or other securities.
Canadian Banks vs US Banks
   The system in Canada is referred to as branch
     Branch banking – a system of banking in which a
      commercial bank is allowed to operate branches of
      the main bank.
   In Canada there are 8 domestic chartered
    banks. Foreign banks are allowed to operate in
    Canada, but they are not allowed to have an
    extensive system of branches like Canadian
Canadian Banks vs US Banks
   The system in the USA is unit-banking.
     Unit banking – the system in which commercial banks
      are either not allowed to operate branches or allowed
      to operate only a limited number.
   There are no banks with offices all across the
    country. Some banks regulated by federal law;
    others regulated by state law. Some states allow
    branches, but they are usually within a restricted
    area. The U.S. has more than 13 000
    commercial banks.
Rank                                Country (Year                Assets
2006    Bank                           End)             ($millions CDN)

 1      UBS                        Switzerland(12/06)         2,288,498

 2      Barclays Bank                 U.K. (12/06)            2,280,243

 3      BNP Paribas                 France (12/06)            2,210,498

 4      Citigroup                     U.S. (12/06)            2,193,743

 5      HSBC Holdings                 U.K. (12/06)            2,168,341

 6      Credit Agricole Group       France (12/06)            2,118,913

 7      Royal Bank of Scotland        U.K. (12/06)            1,993,482

        Mitsubishi UFJ Financial
 8                                   Japan (03/07)            1,840,463

 9      Deutsche Bank               Germany(12/06)            1,728,429

 10     Bank of America Corp          U.S. (12/06)            1,701,032

 40     Royal Bank of Canada        Canada(10/06)              557,147

 47     Toronto-Dominion Bank       Canada(10/06)              407,822

 49     Scotiabank                  Canada(10/06)              393,387

 56     Bank of Montreal            Canada(10/06)              324,622

 58     CIBC                        Canada(10/06)              315,519

109     Desjardins Group            Canada(12/06)              135,126

119     National Bank of Canada     Canada(10/06)              117,454