First, negative real interest rates punish savings and reward investment, thereby implying a transfer of resources from the former activity to the latter. To counter this effect, savings institutions such as mutual and pension funds may seek higher returns in risky assets with price implications that may not be fully understood.
Second, extraordinarily benign financial conditions may have created an environment of over-leveraging and excess lending, potentially endangering the stability of the financial system. Third, the size and composition of the asset purchases may have distorted resource allocation, postponing balance sheet adjustments and crowding out other financial-market players. Fourth, the independence of monetary policy from fiscal policy may have been damaged.