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# Bank Financial System Integration

# Bank Financial System Integration

## Definition

The interconnection of banks with other financial institutions and the broader economy through various channels including credit, payment systems, and capital markets. This integration can enhance efficiency but also create systemic risks.

## Source Chapter

Book II, Chapter 2

## Context

Smith analyses how banks integrate with the broader financial system and economy, showing both the benefits of integration for efficiency and the risks it creates for systemic stability.

## Economic Domain

General Theory

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