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# Bank Monetary Stability

## Definition

The condition where the money supply and credit creation by banks support rather than destabilise the broader economy. This stability requires appropriate regulation and prudent bank management.

## Source Chapter

Book II, Chapter 2

## Context

Smith examines the conditions necessary for monetary stability in banking systems. He shows how stable money and credit creation support economic development while instability can cause significant economic disruption.

## Economic Domain

Regulation

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