678 B
678 B
Bank Systemic Stability
Definition
The condition where the banking system as a whole maintains stability and continues to provide essential financial services even when individual banks face difficulties. This stability requires appropriate regulation and market discipline.
Source Chapter
Book II, Chapter 2
Context
Smith analyses the conditions necessary for systemic stability in banking, showing how stable banking systems can better support economic development and withstand periods of stress.
Economic Domain
Regulation