Easy monetary policy is increasing systemic risk. The next crisis might stem from central banks’ response to the last one, as 10 years of extraordinary policy herds investors into less liquid assets.

Low interest rates have driven a search for yield, creating a boom in alternatives. Retail investors are being drawn-in, tempted by attractive dividends. Infrastructure funds and exchange traded funds, in particular, appear to transform lumpy illiquid long term investments into accessible funds. But how these funds react under stress is somewhat unknown. Regulators are beginning to recognise the risk but need to move more quickly and decisively.