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# Bank Systemic Stability

## Definition

The condition where the banking system as a whole maintains stability and continues to provide essential financial services even when individual banks face difficulties. This stability requires appropriate regulation and market discipline.

## Source Chapter

Book II, Chapter 2

## Context

Smith analyses the conditions necessary for systemic stability in banking, showing how stable banking systems can better support economic development and withstand periods of stress.

## Economic Domain

Regulation

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