For example, (i)  Greater supply of money can facilitate ease of financial transactions, including the financing of government deficits, but this can cause economy to over-heat in due course and trigger (hyper-) inflationary pressures or even a full-blown crisis that eventually require sharper monetary contractions;  (ii)  Excessive lowering of interest rates and/or relaxation in bank capital and liquidity requirements can lead to greater credit creation, asset-price inflation, and semblance of strong economic growth in the short term, but excessive credit growth is usually accompanied by lending down the quality curve which triggers mal-investment, assetprice crashes, and financial crises in the long term;  (iii)  Allowing foreign capital flows to flood into the economy can temporarily ease the financing pressures for an expanding government balance-sheet and the crowded-out  2  See Acharya and Rajan (2013) for a complete theoretical analysis modeling government myopia and populism (maximising simply the cash-flow and spending each period) in the presence of a sovereign debt market; implications for policies governing the financial sector; and attendant risks in the form of economic repression and financial crises.
4  private sector, but a “sudden stop” or exodus of these flows in future can trigger a collapse of the exchange rate with adverse economy-wide spillovers; and, (iv)  Sweeping bank loan losses under the rug by compromising supervisory and regulatory standards can create a façade of financial stability in the short run, but inevitably cause the fragile deck of cards to fall in a heap at some point in future, likely with a greater taxpayer bill and loss of potential output.