---
entity_slug: bank_systemic_risk_management
evaluator: gemini-2.5-flash-lite
evaluated_at: '2026-04-21T21:49:35.222637'
overall_score: 4.0
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition is precise and clearly outlines the purpose of bank systemic
    risk management. It avoids being an overly broad umbrella term.
- name: source_grounding
  value: 3.0
  max_value: 5.0
  rationale: While the concept of managing risks to the banking system is present
    in Book II, Chapter 2, the explicit framing of "systemic risk management" as a
    distinct entity with specific practices might be a slight abstraction beyond Smith's
    direct terminology.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: The "Regulation" domain is highly appropriate. Managing systemic risk
    is fundamentally a regulatory concern aimed at ensuring the stability of the financial
    system.
- name: vsm_relevance
  value: 4.0
  max_value: 5.0
  rationale: This entity strongly maps to VSM System 3 (Internal Regulation/Audit)
    as it involves monitoring and controlling internal operations to prevent systemic
    failures. It also has elements of System 5 (Policy) in setting overall stability
    goals.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The entity provides good explanatory value by highlighting a crucial
    mechanism for maintaining financial stability. It explains *how* the banking system
    can be protected from cascading failures.
---

# Evaluation: Bank Systemic Risk Management

## definition_precision — 4.0 / 5.0

The definition is precise and clearly outlines the purpose of bank systemic risk management. It avoids being an overly broad umbrella term.

## source_grounding — 3.0 / 5.0

While the concept of managing risks to the banking system is present in Book II, Chapter 2, the explicit framing of "systemic risk management" as a distinct entity with specific practices might be a slight abstraction beyond Smith's direct terminology.

## domain_placement — 5.0 / 5.0

The "Regulation" domain is highly appropriate. Managing systemic risk is fundamentally a regulatory concern aimed at ensuring the stability of the financial system.

## vsm_relevance — 4.0 / 5.0

This entity strongly maps to VSM System 3 (Internal Regulation/Audit) as it involves monitoring and controlling internal operations to prevent systemic failures. It also has elements of System 5 (Policy) in setting overall stability goals.

## explanatory_value — 4.0 / 5.0

The entity provides good explanatory value by highlighting a crucial mechanism for maintaining financial stability. It explains *how* the banking system can be protected from cascading failures.
