For nearly a century, the Canadian government has shown little interest in creating a central bank. The Canadian economy was small and operated through a network of branches and banks. The branch network had a limited number of banks, with more branches connecting even the most rural areas. This network worked perfectly for Canada, a central bank was simply too big and cost too much in resources for a small and rather underdeveloped economy, while this system could easily handle demand without strain. Unfortunately, the network of branches and banks could only support the growth of Canada's economy for so long. By the 1930s, the Great Depression was well underway. Canada was hit hard by the Depression due to the influence of its neighbor, the United States of America. Prime Minister Borden once again considered opening a central bank in Canada and finally in 1935; the Bank of Canada opened its doors for the first time. It was originally a private company and, three years after its opening in 1938, the Bank of Canada became a crown corporation when the Canadian government purchased all of its shares. The Bank of Canada's purpose was to protect Canada's financial well-being and it still manages all monetary policy today. The aim of the Bank of Canada which manages monetary policy is to keep inflation rates stable and as low as possible. The Great Depression lasted through most of the 1930s. During this period, investors lost all confidence in the economy. Prime Minister Bennett, who served until 1935, received much criticism "for the lack of direct means in Canada for the establishment of international accounts". Prime Minister Bennett created the Bank of Canada Act to address major problems that hindered prosperity. There was a need for Can......middle of paper......opened in 1820 and still operates today. The way banks are run in Canada is another great example of how effective Bank of Canada regulation can be. While some of the regulations put in place in Canada seem out of step at times, it is this regulation that has allowed Canadians to continue to have a healthy and vibrant economy. The number of bankruptcies declared in Canada over the last ten years has remained essentially unchanged due to banks' credit acceptance requirements. Indeed, the greatest challenge Canada will face in the future will be to transform our economy from a resource-based economy to a product-producing economy. A stable banking system, guided by a regulated monetary policy, will be the first important requirement. Investment in the Canadian economy will only happen if Canada is seen around the world as a transparent and trustworthy banking system.