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# Bank Operational Efficiency

## Definition

The effectiveness with which banks manage their operations to maximise their contribution to economic activity while minimising costs and risks. This includes efficient note issuance, prudent lending, and effective reserve management.

## Source Chapter

Book II, Chapter 2

## Context

Smith examines how banks can operate efficiently to serve economic needs while maintaining stability. He analyses the various operational decisions that affect efficiency and their impact on both the banks and the broader economy.

## Economic Domain

Accumulation

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