This article focuses on developments in banking and monetary policy in Canada. It has been the declared policy of the Canadian government that the twin objectives of economic expansion and financial stability are to be pursued by methods, which would give encouragement to private enterprise and freedom to the consumer. Consequently, the policies, which were adopted to influence both the internal and external operations of the economy, were confined almost exclusively to those, which worked through the price mechanism rather than through use of direct and qualitative controls. The treasury and the Central Bank were the main instrument for implementation of this policy. In Canada the Central Bank is not subject to any directions in the sphere of monetary policy proper. Occasions for direction arise only in connection with matters for which the Bank acts as agent for the Minister of Finance; namely, the exchange rate and the technical management of the public debt. Although the government wholly owns the Bank, it is by statute responsible for the initiation and conduct of monetary policy.