Bank of Canada

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Departments at the Bank

Banking Operations

Role

The Department of Banking Operations is a key player in three of the Bank's core functions: Currency, Financial System, and Funds Management. For the Currency function, the department strives to maintain a leading-edge approach to bank note security and distribution, creating bank notes that all Canadians can use with pride and trust. In its contribution to the Financial System and Funds Management functions, the department seeks to be recognized domestically and internationally for its operational and risk-management expertise in the areas that are critical to the Canada's payment clearing and settlement system. In pursuing this vision, the department carries out operations and research internally and also works in close partnership with other departments in the Bank, the federal government, financial institutions, other central banks, and the public.

Organization

The Department of Banking Operations has five business lines and operates through a team-based organizational structure. Four business lines relate to currency operations, while the fifth encompasses the financial system and funds-management functions.

Currency

Responsibility for the currency function rests entirely with the Department of Banking Operations. This function has four business lines (research and development, production, distribution, and communication and compliance). The department also supports the Bank's core functions through its five regional offices across the country, which liaise with local clients and participate in the Bank's outreach program. The Department is also responsible for the management of the Bank's Currency Museum, which is custodian of the internationally recognized National Currency Collection.

The above activities meet the Bank's objectives of providing Canadians with secure bank notes and ensuring the efficiency of the bank note life cycle. These activities are guided by a strategic view with respect to the long-term use of bank notes as a payment vehicle and their role with respect to other means of payment, including coins and electronic cash. Ongoing research explores ways to enhance both the security and durability of bank notes. Bank note production involves inventory management, transportation, and the manufacturing of the Optical Security Material, a key security feature on high-denomination bank notes. The actual printing of the notes is performed by firms in the private sector. The final distribution of bank notes is handled by Canada's financial institutions, but is overseen by the Bank. The Department also operates a communication and compliance program designed to foster pride in our currency and promote awareness of the security features so that the general public, financial institutions, and the retail sector can confidently recognize and use genuine bank notes. This work to address counterfeiting and other infringements of bank note security is pursued in collaboration with key partners within the law-enforcement community, the national business community, and the banking industry.

Financial System and Funds Management

As part of the financial system function, banking operations carried out in the department provide final-settlement, liquidity facilities, and other services to participants in Canada's payment systems. In addition, the Bank of Canada is the banker for other important clearing and settlement systems. In its funds-management function, the Bank is the banker for the federal government, other central banks, and a number of international financial organizations, and the Department carries out operations related to these areas of responsibility. The Bank strives to provide its largest client, the federal government, as well as other clients, with cost-effective banking services. Banking services specialists work closely with other Bank departments involved in clearing and settlement systems and funds management, as well as with external organizations involved in these areas. Research focuses on operational risk, understanding the clearing and settlement system environment in which banking services operations are carried out, and developing sound operational policies.

The Department uses a complex network of computer systems and software applications to support its banking services operations. Given the nature and complexities of these systems, the Department administers its own in-house support for these critical applications.