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Business, 13.11.2019 06:31 cece4649

In the period since the financial crisis of 2007-2009, inflation has been low in many countries, while a few experienced outright deflation. why might unexpected deflation be of particular concern to someone managing a bank? unexpected deflation is associated with of borrowers, as the nominal value of their assets but the dollar amount of their liabilities . this weakens creditworthiness and can lead to lending as asymmetric information problems worsen. in turn, credit supply can diminish economic activity, leading to defaults, a deterioration in the quality of the bank’s balance sheet and ultimately to bank insolvency.

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In the period since the financial crisis of 2007-2009, inflation has been low in many countries, whi...
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