Deflation and investment activities of banks. The case of Japan in the years 1993-2008

Authors

  • Waldemar Kozioł University of Warsaw

DOI:

https://doi.org/10.12775/EQUIL.2010.015

Keywords:

deflation, debt-deflation, bank investment portfolio

Abstract

The purpose of the article is to identify determinants of investment activities of banks during deflationary process. Japanese experience suggests that the processes of long-term deflation have a substantial impact on the structure of assets and liabilities of banking institutions. In conditions of deflation and 'liquidity trap', classic, deposit-credit activities of banks do not produce adequate profits. As a result it influences negatively bank?s profitability. In this situation banks tend to look for other sources of revenue such as commissions and investment activities. Article shows causes and effects of changes in banks' balance sheets. It is also an attempt to answer the question whether there are possibilities to build an investment portfolio that help to avoid the negative effects of deflation processes.

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References

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Published

2010-06-30

How to Cite

Kozioł, W. (2010). Deflation and investment activities of banks. The case of Japan in the years 1993-2008. Equilibrium. Quarterly Journal of Economics and Economic Policy, 4(1), 191–201. https://doi.org/10.12775/EQUIL.2010.015

Issue

Section

Varia

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