Is it time to start thinking about deflation and what it would mean to your bottom line? More banks are doing as much.

SunTrust has set up a special committee to analyze its exposure to deflation, Reuters reports. BB&T "ran its books through a stress test to gauge the bank's performance in a scenario in which there is deflation for the next 10 years, as part of the bank's own internal projections of various economic scenarios", notes Reuters.

More banks--including Regions Financial and Synovus--are warning about the potential risk of deflation in SEC filings. While deflation is often said to be good for creditors, deflation in a large enough dose can be toxic.

"As Japanese banks discovered in the last decade, deflation means that collateral values decline, giving a bank bigger losses on failed loans," notes Reuters. "And loans may become more likely to fail, as borrowers tire of paying high rates of interest to finance assets that are worth much less than they had been previously. A second credit crisis could emerge."

It remains to be seen if we are heading headlong into a deflationary environment, but it pays to be prepared. Stress tests are in order.

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