The potential damage that could be caused by choking off the recovery is too great. Second, one can argue that, by reducing term premiums, LSAPs in particular have potentially significant benefits in terms of financial stability. A major source of problems during the recent crisis was the excessive maturity transformation undertaken by financial firms.
Put simply, these firms were relying too much on short-term debt. One of the thrusts of regulatory reform has been to attack this problem – for example, via the constructs of the Liquidity Coverage Ratio and the Net Stable Funding Ratio that are a part of Basel III.