---
entity_slug: bank_systemic_stability
evaluator: null
evaluated_at: '2026-02-23T04:37:20.705432'
overall_score: 4.0
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes systemic stability from individual
    bank stability, specifying that it involves the banking system's ability to continue
    providing essential services during stress. The mention of "appropriate regulation
    and market discipline" as requirements adds specificity, though it could be slightly
    more precise about what constitutes "essential financial services."
- name: source_grounding
  value: 3.0
  max_value: 5.0
  rationale: While Smith does discuss banking regulation and the conditions for stable
    banking in Book II, Chapter 2, the modern concept of "systemic stability" as a
    distinct analytical category may be reading contemporary banking theory back into
    Smith's text. Smith focuses more on individual bank prudence and basic regulatory
    principles than on system-wide stability as a separate concern.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: The placement in the "Regulation" domain is entirely appropriate, as
    systemic banking stability is fundamentally a regulatory concern requiring oversight
    and policy intervention. This aligns perfectly with Smith's discussion of banking
    regulation in the cited chapter.
- name: vsm_relevance
  value: 4.0
  max_value: 5.0
  rationale: This entity maps well to S3 (internal regulation/audit) as it concerns
    the regulatory mechanisms needed to maintain system integrity, and also connects
    to S2 (coordination/anti-oscillation) as systemic stability involves preventing
    destabilizing oscillations across the banking network. The regulatory focus gives
    it clear VSM relevance.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The concept provides genuine explanatory power by distinguishing between
    individual bank health and system-wide resilience, illuminating how banking regulation
    must consider network effects and systemic risks. It captures an important structural
    relationship between individual institutions and overall system performance.
---

# Evaluation: Bank Systemic Stability

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes systemic stability from individual bank stability, specifying that it involves the banking system's ability to continue providing essential services during stress. The mention of "appropriate regulation and market discipline" as requirements adds specificity, though it could be slightly more precise about what constitutes "essential financial services."

## source_grounding — 3.0 / 5.0

While Smith does discuss banking regulation and the conditions for stable banking in Book II, Chapter 2, the modern concept of "systemic stability" as a distinct analytical category may be reading contemporary banking theory back into Smith's text. Smith focuses more on individual bank prudence and basic regulatory principles than on system-wide stability as a separate concern.

## domain_placement — 5.0 / 5.0

The placement in the "Regulation" domain is entirely appropriate, as systemic banking stability is fundamentally a regulatory concern requiring oversight and policy intervention. This aligns perfectly with Smith's discussion of banking regulation in the cited chapter.

## vsm_relevance — 4.0 / 5.0

This entity maps well to S3 (internal regulation/audit) as it concerns the regulatory mechanisms needed to maintain system integrity, and also connects to S2 (coordination/anti-oscillation) as systemic stability involves preventing destabilizing oscillations across the banking network. The regulatory focus gives it clear VSM relevance.

## explanatory_value — 4.0 / 5.0

The concept provides genuine explanatory power by distinguishing between individual bank health and system-wide resilience, illuminating how banking regulation must consider network effects and systemic risks. It captures an important structural relationship between individual institutions and overall system performance.
