Both central bank and fiscal measures may contribute to weaken the incentives for banks to clear troubled assets from their balance sheets and to monitor their credit risk carefully. This, in turn, may reinforce the very problems that currently impair the functioning of the financial system. In a low interest rate environment this can foster lending to unprofitable business.
That, in turn, would harm the growth potential of the economy and thereby prepare the ground for weak growth to persist. Very low interest rates can also hamper the functioning of the money market: The lower money market interest rates are, the lower the incentive for banks to trade funds in the market rather than depositing them safely with the central bank.