What significant change occurred in the Bank Act in 1967?

The significant change that occurred in the Bank Act in 1967 is that it allowed banks to charge higher mortgage interest rates. This change marked a shift in the regulatory landscape of the Canadian banking system, as it enabled financial institutions greater flexibility in setting interest rates according to market conditions rather than being restricted by previous rate ceilings.

The change aimed to enhance the banks’ ability to manage risk and adjust to economic conditions, thus facilitating a more competitive environment in the mortgage lending sector. As banks were empowered to determine rates based on their cost of funds and market demand, this ultimately contributed to a wider availability of mortgage products and greater competition among lenders.

Contextually, this change was significant as it occurred during a time when Canada was experiencing economic growth and increased demand for housing, making the capability for banks to charge competitive rates more crucial to respond effectively to the market needs. Such a move was fundamental in shaping the mortgage industry as we know it today.