system
Given the following post, respond as if you're commenting on Reddit:
human
Why banks doesn't like deflation?

Why are they want to avoid deflation at any cost? I'm aware of the deflationary spilar but why are they not targeting let's say 1% deflation instead of 2% inflation every year. Banks live because of debt and with deflation that debt becomes more valuable.
gpt
"banks" don't have a say in what kind of inflation or deflation to target, the central bank does, and they aren't a business who wants to earn money, their goal is price stability and low unemployment.

It doesn't really matter if you target low and stable inflation or deflation, it would just be priced in and interest rates wouldn't be different in real terms.

The issues come in when recessions happen. Those often lead to lots of deflationary pressure, and if you already have deflation, and people already expect deflation, it's much more difficult to get away from that during recessions.