" advocated the establishment of a governmentowned national bank that would be the sole issuer of paper money. " 22 and in 1841, lord sydenham, governor general of the united province of canada, proposed the establishment of a bank with many of the powers and responsibilities of a modern central bank. such a bank, he thought, could finance public works, generate seigniorage, and make paper money more effective. quoted in j. chant, " the canadian experience with counterfeiting, " bank of canada review ( ottawa : bank of canada, summer 2004 ) : 42. v. speer ( compiler ). " the million dollar counterfeiting. " memoirs of a great detective : incidents in the life of john wilson murray, chapter 30. 1904. available at : http : / / gaslight. mtroyal. ca / murray30. htm. j. powell, op. cit., p. 21. the depression of the 1930s provided impetus for the creation of a central bank. a widespread sense that the banking system was not serving the public very well – at a time when the economy was contracting – led to support for the formation of a central bank. the bank of canada's mandate is to promote the economic and financial well - being of the country. the bank does this in three important ways : first, by keeping inflation low, stable, and predictable ; second, by supporting a safe and efficient financial system ; and third, by issuing money that is safe from counterfeiting and readily accepted. these activities help to provide a sound foundation for economic security and growth. the bank of canada issued its first bank notes in 1935. each denomination was issued in separate french and english versions [ image : 1935 - issue bank notes ]. this 1935 series was the only bank of canada series to have a $ 25 denomination. if you want to buy one of these notes, be warned : a single note can fetch up to $ 15, 000 at auction! since 1937, canadian bank notes have been bilingual. to deter counterfeiting, the bank has issued a new series of bank notes every 15 years or so [ image : $ 20 bank note over the years ]. anti - counterfeiting features have included intaglio ( or raised ) printing, multicoloured tints, microprint, optical security devices, and fluorescent fibres. but today's technology has increased the counterfeiting threat, and the bank expects to issue new

was greatly enhanced by the stable low - inflation environment. and while fiscal and political uncertainty resulted in appreciable financial market volatility, as well as vulnerability to external shocks in the period before 1996, 9 i believe that the situation would have been considerably worse without the anchor provided by low inflation and the inflation targets. and, in conjunction with improved fiscal policy, they have facilitated better economic performance in the more recent period and have allowed us to weather the current international financial problems with fewer difficulties than before. targets should continue to provide a sound foundation for good economic performance and for coping with the international shocks that are bound to hit us from time to time. increased monetary policy transparency and accountability when the government and the bank agreed on the initial targets in 1991, the main concern was to lay out a path for the reduction of inflation on the way to price stability. despite the emphasis that the bank had for some years placed on price stability as the objective of monetary policy, 10 the period over which the objective was to be achieved was a source of uncertainty among the public. thus, one of the key benefits of the targets was expected to be increased transparency with respect to the objective of monetary policy, leading to a reduction of public and financial market uncertainty. the concept of monetary conditions includes movements in short - term interest rates and in the exchange rate, the two channels through which monetary policy operates. see freedman ( 1994 ) and thiessen ( 1995 ). clinton and zelmer ( 1997 ). see bank of canada ( 1987 ) and crow ( 1988 ). the announcement in 1991 also noted that the targets should provide a better basis for judging the performance of monetary policy. criticisms of monetary policy had often implicitly assumed that the bank should be pursuing policy objectives other than price stability. by setting out a clear objective, and with the commitment of the government to that objective, the bank hoped that future public assessments of monetary policy performance would focus more clearly on its record of achieving price stability. there is no question that explicit targets for inflation control make the objective of monetary policy more transparent and provide a better basis than before for holding the central bank accountable for its conduct of monetary policy. i have not tried to pull together evidence that, with a clearer objective, public commentary on monetary policy since 1991 has involved fairer assessments of the performance of the bank of canada. and it is difficult to demonstrate conclusively that, overall, financial and economic uncertainty in canada have been less than they would have been without