22 lines
735 B
Markdown
22 lines
735 B
Markdown
<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-2-chapter-02 -->
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# Bank Systemic Risk
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## Definition
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The potential for problems in one bank or part of the banking system to spread throughout the entire financial system, potentially causing widespread economic disruption. This risk requires careful management and appropriate regulation.
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## Source Chapter
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Book II, Chapter 2
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## Context
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Smith analyses how problems in individual banks can spread through the banking system and affect the broader economy. He shows how systemic risk emerges from the interconnected nature of banking operations and the importance of prudent management.
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## Economic Domain
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Regulation
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---
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