---
entity_slug: bank_financial_system_stability
evaluator: null
evaluated_at: '2026-02-23T00:42:17.203459'
overall_score: 4.0
scores:
- name: definition_precision
  value: 3.0
  max_value: 5.0
  rationale: The definition captures a coherent concept about financial system stability
    but remains somewhat broad and umbrella-like. While it identifies key components
    (banks, financial institutions, regulation), it could be more precise about what
    constitutes "stability" and "essential financial services."
- name: source_grounding
  value: 4.0
  max_value: 5.0
  rationale: Smith does indeed analyze banking and financial stability in Book II,
    Chapter 2, discussing how banks should operate prudently and the conditions for
    financial system soundness. The entity accurately reflects Smith's concerns about
    banking regulation and systemic stability.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: '"Regulation" is the correct domain placement, as Smith''s discussion
    of financial system stability is fundamentally about the need for appropriate
    regulatory frameworks and market discipline to maintain banking soundness.'
- 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 stability, and partially to
    S2 (coordination/anti-oscillation) as financial stability involves dampening destabilizing
    fluctuations across the financial system.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The entity provides genuine explanatory value by illuminating the structural
    relationship between regulation, market discipline, and economic development.
    It captures an important mechanism Smith identifies for how financial systems
    can support broader economic growth through stability.
---

# Evaluation: Bank Financial System Stability

## definition_precision — 3.0 / 5.0

The definition captures a coherent concept about financial system stability but remains somewhat broad and umbrella-like. While it identifies key components (banks, financial institutions, regulation), it could be more precise about what constitutes "stability" and "essential financial services."

## source_grounding — 4.0 / 5.0

Smith does indeed analyze banking and financial stability in Book II, Chapter 2, discussing how banks should operate prudently and the conditions for financial system soundness. The entity accurately reflects Smith's concerns about banking regulation and systemic stability.

## domain_placement — 5.0 / 5.0

"Regulation" is the correct domain placement, as Smith's discussion of financial system stability is fundamentally about the need for appropriate regulatory frameworks and market discipline to maintain banking soundness.

## 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 stability, and partially to S2 (coordination/anti-oscillation) as financial stability involves dampening destabilizing fluctuations across the financial system.

## explanatory_value — 4.0 / 5.0

The entity provides genuine explanatory value by illuminating the structural relationship between regulation, market discipline, and economic development. It captures an important mechanism Smith identifies for how financial systems can support broader economic growth through stability.
