---
entity_slug: bank_regulatory_framework
evaluator: null
evaluated_at: '2026-02-23T00:49:37.879382'
overall_score: 4.0
scores:
- name: definition_precision
  value: 3.0
  max_value: 5.0
  rationale: The definition captures a coherent concept about balancing stability
    and efficiency in banking governance, but uses somewhat vague terms like "sufficient
    freedom" and "competing objectives" without precise boundaries. It's non-circular
    but could be more specific about what constitutes this framework.
- name: source_grounding
  value: 4.0
  max_value: 5.0
  rationale: Smith does indeed analyze banking regulation in Book II, Chapter 2, discussing
    how minimal formal regulation combined with market forces can govern banking operations.
    The concept of balancing stability with operational freedom aligns well with Smith's
    actual arguments about banking oversight.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: '"Regulation" is the appropriate domain for this entity, as it directly
    concerns the governance and oversight mechanisms for banking institutions. This
    clearly falls within regulatory rather than operational or market domains.'
- name: vsm_relevance
  value: 4.0
  max_value: 5.0
  rationale: This entity maps naturally to S3 (internal regulation/audit) as it concerns
    the regulatory mechanisms that monitor and control banking operations. It also
    has some S2 elements (coordination/anti-oscillation) in its role of preventing
    banking instability.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The entity illuminates an important structural mechanism in Smith's economic
    system - how banking stability is maintained through regulatory frameworks rather
    than just market forces alone. It explains the institutional architecture needed
    for banking to function effectively within the broader economy.
---

# Evaluation: Bank Regulatory Framework

## definition_precision — 3.0 / 5.0

The definition captures a coherent concept about balancing stability and efficiency in banking governance, but uses somewhat vague terms like "sufficient freedom" and "competing objectives" without precise boundaries. It's non-circular but could be more specific about what constitutes this framework.

## source_grounding — 4.0 / 5.0

Smith does indeed analyze banking regulation in Book II, Chapter 2, discussing how minimal formal regulation combined with market forces can govern banking operations. The concept of balancing stability with operational freedom aligns well with Smith's actual arguments about banking oversight.

## domain_placement — 5.0 / 5.0

"Regulation" is the appropriate domain for this entity, as it directly concerns the governance and oversight mechanisms for banking institutions. This clearly falls within regulatory rather than operational or market domains.

## vsm_relevance — 4.0 / 5.0

This entity maps naturally to S3 (internal regulation/audit) as it concerns the regulatory mechanisms that monitor and control banking operations. It also has some S2 elements (coordination/anti-oscillation) in its role of preventing banking instability.

## explanatory_value — 4.0 / 5.0

The entity illuminates an important structural mechanism in Smith's economic system - how banking stability is maintained through regulatory frameworks rather than just market forces alone. It explains the institutional architecture needed for banking to function effectively within the broader economy.
