---
entity_slug: bank_money
evaluator: null
evaluated_at: '2026-02-23T00:43:25.412986'
overall_score: 4.2
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes bank money from physical currency
    by its key characteristics (credit-based, backed by deposits, stable value, immune
    to physical degradation). It avoids circularity and captures a distinct monetary
    instrument concept.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This entity directly reflects Smith's detailed discussion of the Bank
    of Amsterdam in Book IV, Chapter 3, where he explicitly contrasts bank money with
    current money and explains its advantages. The definition closely follows Smith's
    actual analysis.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: '"Exchange" is the correct domain placement since bank money functions
    as a medium of exchange and unit of account in commercial transactions. Smith
    specifically discusses it in the context of facilitating trade and commerce.'
- name: vsm_relevance
  value: 3.0
  max_value: 5.0
  rationale: Bank money maps moderately well to S1 (primary operations) as a fundamental
    tool for conducting economic transactions, but it could also relate to S2 (coordination)
    by standardizing exchange mechanisms. The mapping is not as clear-cut as more
    structural economic concepts.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: "This entity illuminates an important mechanism in Smith's monetary theory\u2014\
    how banking institutions create superior exchange media that solve problems of\
    \ currency degradation and facilitate international commerce. It reveals structural\
    \ relationships between banking, currency stability, and trade efficiency."
---

# Evaluation: Bank Money

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes bank money from physical currency by its key characteristics (credit-based, backed by deposits, stable value, immune to physical degradation). It avoids circularity and captures a distinct monetary instrument concept.

## source_grounding — 5.0 / 5.0

This entity directly reflects Smith's detailed discussion of the Bank of Amsterdam in Book IV, Chapter 3, where he explicitly contrasts bank money with current money and explains its advantages. The definition closely follows Smith's actual analysis.

## domain_placement — 5.0 / 5.0

"Exchange" is the correct domain placement since bank money functions as a medium of exchange and unit of account in commercial transactions. Smith specifically discusses it in the context of facilitating trade and commerce.

## vsm_relevance — 3.0 / 5.0

Bank money maps moderately well to S1 (primary operations) as a fundamental tool for conducting economic transactions, but it could also relate to S2 (coordination) by standardizing exchange mechanisms. The mapping is not as clear-cut as more structural economic concepts.

## explanatory_value — 4.0 / 5.0

This entity illuminates an important mechanism in Smith's monetary theory—how banking institutions create superior exchange media that solve problems of currency degradation and facilitate international commerce. It reveals structural relationships between banking, currency stability, and trade efficiency.
