Finance with Pall

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Pall, a woman in a suit is drawn pointing at a graphic that reads “Finance with Pall”
Finance? More like Fun-ance! Allister White

Making financial news make sense

Welcome to the Carillon’s “Finance with Pall,” a news finance column covering  important economic and financial news from Canada and around the world, focusing on explaining what that news means for students. From tuition costs to job markets, we’ll break down how these changes affect you, making finance easy to understand and relevant to your life. If you have any topic requests or want me to highlight a stock price – shoot me an email at pall@carillonregina.com

Disclaimer: The information in this column is intended for educational purposes and is not financial advice. For personalized financial guidance, please consult a licensed professional.  

News of the week

Bank of Canada to reduce settlement balances   

Recently, the Bank of Canada has announced that they plan to conduct a quantitative tightening program in the coming few months. This will mark the Bank of Canada as one of the few global banks in the world to take such a step. 

This program, according to Reuters, would reduce settlement balances to between $50 billion and $70 billion, much, much lower than the current $130 billion.  

First Quebec-based Crypto Trading Platform: Montreal’s Shakepay is making waves in the investment world by being a member of the Canadian Investment Regulatory Organization (CIRO). This makes them the first trading platform from Quebec to be CIRO-regulated, reinforcing its high compliance standard and consumer trust in its platform. 

This regulatory oversight ensures that the platform runs smoothly and continues the reassurance for the customers that the company is legitimate. Due to this accessibility, Shakepay is helping Canadians be more involved in the digital economy. They have been appealing to the Department of Finance that bitcoin should be classified as a qualified investment “during a federal consultation about whether the government should allow Canadians to deposit cryptocurrency directly into tax-advantaged savings plans such as RRSPs or TFSA”, according to Betakit. 

This membership could also entail the creation of more jobs as Shakepay would want to expand operations and continue bridging the gap of cryptocurrency and traditional finance. 

Terms of the Week:

This week’s news was term-heavy, so here is an explanation about a few of them.

Quantitative tightening is a monetary policy where the central bank removes money from the economy by selling its investments or letting their bonds mature without reinvesting into the economy. This act reduces money supply (total amount of money in circulation in the economy) in the economy which ultimately makes borrowing expensive. People generally do not want to spend, reducing consumer spending and overall demand in the economy. Any Central bank would want to do this to curb inflation. This could dampen the economic growth and affect the number of jobs, making it harder to borrow. Thus, quantitative easing could stabilize the economy, but this has to be done carefully in order to prevent recession.  

Settlement balances are the reserves (money kept on hand by the bank to meet needs such as customer withdrawals, payments, or for regulatory requirements) that banks hold in their account at the central bank. These balances ensure smooth operations and help settle transactions between different financial institutions. Central banks like the Bank of Canada adjust these balances to help control the amount of money in the economy.  



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