What is the main function of the Bank Act in Canada?

The main function of the Bank Act in Canada is to protect depositors' funds. This legislation establishes the framework within which banks operate, focusing on ensuring the stability and integrity of the banking system. By imposing regulatory requirements on banks, the Act aims to safeguard the interests of depositors, ensuring that their money is secure and that the banks follow prudent practices.

In addition to setting out the requirements for bank licensing, capital management, and risk management, the Bank Act includes provisions to ensure that banks are adequately funded and can withstand financial stress. By putting these protections in place, the Act fosters public confidence in the banking system, encouraging people to deposit their money without fear of loss.

This is essential for the functioning of the economy, as it allows consumers and businesses to have trust in financial institutions, which, in turn, supports economic growth and stability. Other options like regulating non-profit organizations, enhancing competition among corporations, or setting tax rates for corporations fall outside the primary scope of the Bank Act and instead pertain to different regulatory frameworks and areas of Canadian law.