> by adding risk to their depositor funds. lending by a bank could've also achieved the same. Depositor's funds are always "risked" in a non 100% fractional re

> by adding risk to their depositor funds. lending by a bank could've also achieved the same. Depositor's funds are always "risked" in a non 100% fractional reserve system. The problem isn't with banks buying long-dated bonds, but that they may have bought too much. The central bank, the thinking goes, could lend as a last resort, so the risk of liquidity (or lack thereof) is lowered; this means any bank that _didn't_ buy a higher yield is losing money compared to their competitors who did (until the shit hits the fan).