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# Bank Public Utility

## Definition

The role of banks in serving the public interest by facilitating commerce, reducing the need for precious metals in circulation, and converting dead stock into productive capital. This utility must be balanced against the risks of bank operations.

## Source Chapter

Book II, Chapter 2

## Context

Smith argues that banks serve a vital public utility by facilitating commerce and making more efficient use of capital. He shows how this utility must be balanced against the need for prudent management and appropriate regulation.

## Economic Domain

General Theory

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