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# Bank Risk Management

## Definition

The practices and systems by which banks identify, assess, and control various risks including credit risk, liquidity risk, and operational risk. Effective risk management is essential for banking stability and economic development.

## Source Chapter

Book II, Chapter 2

## Context

Smith examines how banks must manage various risks to maintain stability and serve economic needs. He analyses the different types of risk and the methods banks use to control them.

## Economic Domain

Regulation

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