<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-2-chapter-02 -->

# Bank Market Structure

## Definition

The organisation and composition of the banking industry, including the number of banks, their size, and their market shares. Market structure affects competition, efficiency, and stability in banking.

## Source Chapter

Book II, Chapter 2

## Context

Smith examines how market structure affects banking efficiency and stability, showing how competition among banks can enhance both efficiency and stability.

## Economic Domain

Regulation

---
