Large Value Transfer System
Encyclopedia
The Large Value Transfer System, or LVTS, is a system in Canada
for electronic wire transfer
s of large sums of money; it permits the participating institutions and their clients to send large sums of money securely in real-time with complete certainty that the payment will settle. LVTS processes the majority of payments made every day in Canada, and is designed to work with funds in Canadian dollar
s (CAD). On a normal business day, it clears and settles around CAD $146 billion. Frequently, when settling the payments made through LVTS between each other, some banks find themselves with extra funds, while others find themselves short; to come up with money, the banks can borrow it from each other for a day, or "overnight". The rate at which they borrow is called overnight rate
, targets for which are set by the Bank of Canada
as part of its monetary policy
.
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
for electronic wire transfer
Wire transfer
Wire transfer or credit transfer is a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office...
s of large sums of money; it permits the participating institutions and their clients to send large sums of money securely in real-time with complete certainty that the payment will settle. LVTS processes the majority of payments made every day in Canada, and is designed to work with funds in Canadian dollar
Canadian dollar
The Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies...
s (CAD). On a normal business day, it clears and settles around CAD $146 billion. Frequently, when settling the payments made through LVTS between each other, some banks find themselves with extra funds, while others find themselves short; to come up with money, the banks can borrow it from each other for a day, or "overnight". The rate at which they borrow is called overnight rate
Overnight rate
The overnight rate is generally the rate that large banks use to borrow and lend from one another on the overnight market. In some countries , the overnight rate may be the rate targeted by the central bank to influence monetary policy...
, targets for which are set by the Bank of Canada
Bank of Canada
The Bank of Canada is Canada's central bank and "lender of last resort". The Bank was created by an Act of Parliament on July 3, 1934 as a privately owned corporation. In 1938, the Bank became a Crown corporation belonging to the Government of Canada...
as part of its monetary policy
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
.
Participating Institutions
, there were 15 institutions participating in LVTS:- Alberta Treasury Branches
- Bank of America National AssociationBank of AmericaBank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
- Bank of CanadaBank of CanadaThe Bank of Canada is Canada's central bank and "lender of last resort". The Bank was created by an Act of Parliament on July 3, 1934 as a privately owned corporation. In 1938, the Bank became a Crown corporation belonging to the Government of Canada...
- Bank of MontrealBank of MontrealThe Bank of Montreal , , or BMO Financial Group, is the fourth largest bank in Canada by deposits. The Bank of Montreal was founded on June 23, 1817 by John Richardson and eight merchants in a rented house in Montreal, Quebec. On May 19, 1817 the Articles of Association were adopted, making it...
- Bank of Nova Scotia
- BNP ParibasBNP ParibasBNP Paribas S.A. is a global banking group, headquartered in Paris, with its second global headquarters in London. In October 2010 BNP Paribas was ranked by Bloomberg and Forbes as the largest bank and largest company in the world by assets with over $3.1 trillion. It was formed through the merger...
(Canada) - CIBC
- Credit Union Central of CanadaCredit Union Central of CanadaCredit Union Central of Canada is the national cooperative federation for credit unions in Canada, outside Quebec. The Toronto-based organization provides federal government relations, media relations, represents the industry in many associations and organizes several conferences each year.As of...
- HSBC Bank CanadaHSBC Bank CanadaHSBC Bank Canada, formerly the Hongkong Bank of Canada , is a bank in Canada that is part of British banking giant HSBC - one of the largest banking groups in the world. HSBC Canada is the seventh largest bank in Canada, with offices in every province except Prince Edward Island, and is the...
- Laurentian Bank of CanadaLaurentian Bank of CanadaThe Laurentian Bank of Canada is a Schedule I bank in the province of Quebec. . LBC's Institution Number is 039.-History:...
- La Caisse centrale Desjardins du QuébecMouvement DesjardinsThe Desjardins Group is the largest association of credit unions in North America. It was founded in 1900 in Lévis, Quebec by Alphonse Desjardins....
- National Bank of CanadaNational Bank of CanadaNational Bank of Canada is the 6th largest bank and 8th largest financial institution in Canada. The bank's headquarters are in Montreal, Quebec....
- Royal Bank of CanadaRoyal Bank of CanadaThe Royal Bank of Canada or RBC Financial Group is the largest financial institution in Canada, as measured by deposits, revenues, and market capitalization. The bank serves seventeen million clients and has 80,100 employees worldwide. The company corporate headquarters are located in Toronto,...
- State Street Bank and Trust CompanyState Street Bank and Trust CompanyState Street Bank and Trust Company or simply State Street is a custodian bank organized as a Massachusetts trust company specializing in services to mutual funds and their advisers, collective investment funds, corporate and public pension funds, insurance companies, operating companies and...
- Toronto-Dominion BankToronto-Dominion BankThe Toronto-Dominion Bank , is the second-largest bank in Canada by market capitalization and based on assets. It is also the sixth largest bank in North America. Commonly known as TD and operating as TD Bank Group, the bank was created in 1955 through the merger of the Bank of Toronto and the...