The year 1954 was an active one in the development of Canada's financial system. Important revisions were made to banking legislation. The statutory minimum cash reserve ratio required of the chartered banks was changed from a fixed daily ratio of 5 per cent to a daily average of 8 per cent which the banks must achieve for the calendar month. The central bank was granted another tool of monetary control—the right to alter the minimum cash reserve ratio. The chartered banks were admitted to new fields of lending. In June another step was taken to broaden the short-term money market when the chartered banks commenced to make day-to-day loans. These developments reflected a desire on the part of the monetary authorities to increase the sensitivity and flexibility of the nation's financial system.
Meanwhile Canada's fourth housing act was passed. The National Housing Act, 1954, marked the federal government's twentieth year of continuous assistance to housebuilding. Like its forerunners, the Dominion Housing Act of 1935 and the National Housing Acts of 1938 and 1944, the new act provides assistance primarily through the medium of the mortgage market. All the acts have been concerned with the provision of mortgage credit for housebuilding at terms more favourable to the borrower than those prevailing in the conventional loan market.