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# Natural Liberty in Banking

## Definition

The principle that banking should be free from excessive regulation, allowing individuals to engage in banking activities as they choose, provided basic safeguards are maintained. Smith argues this freedom promotes efficiency and security.

## Source Chapter

Book II, Chapter 2

## Context

Smith defends the freedom of banking from excessive regulation, arguing that natural liberty in this sphere promotes both efficiency and security. He compares banking regulation to building regulations that prevent fire spread.

## Economic Domain

Regulation

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