INFLUENCE OF INFLATION AND DEFLATION ON INTEREST AND CREDIT RISKS OF COMMERCIAL BANKS

Afanasyeva Oksana Nikolaevna, Doctor of Economics, Professor of the Department of Finance and Monetary Relations, Russian Foreign Trade Academy, Ministry of Economic Development of the Russian Federation

Siris Angelina Aleksandrovna, Bachelor’s student of the Faculty of Foreign Trade Management, Russian Foreign Trade Academy, Ministry of Economic Development of the Russian Federation

Abstract

The article considers the influence of inflation and deflation on interest and credit risks of commercial banks. The content of the concepts of inflation and deflation, their peculiarities as economic phenomena are presented. The content of deflationary spiral is disclosed. The authors have considered interest and credit risks, directions of influence of inflation and deflation on them. The paper offers recommendations on management of banking activities in conditions of inflation and deflation in order to reduce interest and credit risks.

KEYWORDS: inflation, deflation, economic phenomena, credit risk, interest rate risk, bank profit, banking management, risk reduction.

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