Why Did the Bank of Canada Emerge in 1935?

22 Pages Posted: 14 Aug 2000 Last revised: 8 Sep 2010

See all articles by Michael D. Bordo

Michael D. Bordo

Rutgers University, New Brunswick - Department of Economics; National Bureau of Economic Research (NBER)

Angela Redish

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: November 1986

Abstract

Three possible explanations for the emergence of the Canadian central bank in 1935 are examined: that it reflected the need of competitive banking systems for a lender of the last resort; that it was necessary to anchor the unregulated Canadian monetary system after the abandonment of the gold standard in 1929; and that it was a response to political rather than purely economic pressures. Evidence from a variety of sources (contemporary statements to a Royal Commission, the correspondence of chartered bankers, newspaper reports, academic writings and the estimation of time series econometric models) rejects the first two hypotheses and supports the third.

Suggested Citation

Bordo, Michael D. and Redish, Angela, Why Did the Bank of Canada Emerge in 1935? (November 1986). NBER Working Paper No. w2079. Available at SSRN: https://ssrn.com/abstract=228005

Michael D. Bordo (Contact Author)

Rutgers University, New Brunswick - Department of Economics ( email )

New Brunswick, NJ
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Angela Redish

University of British Columbia (UBC) - Department of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada
604-822-2748 (Phone)
604-822-5915 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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