It began, for instance, to buy bonds on a large scale. These tools had the desired effects on the real economy, and thus on prices. They have brought benefits. But we must remain vigilant about their potential costs, too. For one, the tools may have changed the incentives of banks, businesses and even governments.
In fact, low interest rates and abundant liquidity may encourage investors to take excessive risks. Among other things, we keep a close eye on how much risk banks take. Another issue is that bond purchases by the central bank can reduce liquidity in the relevant markets or distort prices.