Banking in Canada

Banking in Canada is widely considered one of the safest banking systems in the world, ranking as the world's soundest banking system for the past six years according to reports by the World Economic Forum. Released in October 2010, Global Finance magazine put Royal Bank of Canada at number 10 among the world's safest banks and Toronto-Dominion Bank at number 15.Canada’s banks, also called chartered banks, have over 8,000 branches and almost 18,000 automated banking machines (ABMs) across the country. In addition, "Canada has the highest number of ABMs per capita in the world and benefits from the highest penetration levels of electronic channels such as debit cards, Internet banking and telephone banking".

Banking in Canada began to migrate in earnest from colonial overseas banking operations to a local banking system with the founding of the Bank of Montreal in 1817. Other banks soon followed and began business, and after a lengthy approval process began unregulated banking business. These institutions issued their own local currency until amendments in the Dominion Notes Act allowed federal and provincial governments to begin to introduce their own notes starting in 1866. Official Canadian currency took the form of the Canadian dollar in 1871, overriding the currency of individual banks. The establishment of the Bank of Canada in 1935 was also an important milestone in banking and monetary governance.

Despite various loss events (such as the Latin American debt crisis, the collapse of Olympia and York, Enron-related liabilities, and the U.S. Subprime mortgage crisis), the big five banks have thus far proven to be safe and stable companies. For example, in securities prospectuses the Royal Bank of Canada says it has paid a common share dividend in every year since 1870, the year after it received its banking charter.

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