Aggressive monetary policy cannot resolve the structural issues facing the U.S. economy, and a failure to back away from that thinking could cause the market to delay making the fiscal and structural changes needed to steady the economy, said Jaime Caruana, general manager of the Bank for International Settlements.

Caruana warned in a recent speech that monetary policy and long-term initiatives to keep interest rates low create unrealistic expectations about what central banks can and should do. He views the root problems of the economic crisis as structural and fiscal, and says only those types of reforms will bring the economy back.

"Monetary policy can buy time needed for other policies to correct fundamental balance sheet problems," Caruana said. "But even in this transitory role, monetary policy is not without limits or risks. Under current circumstances, the benefits of continued monetary easing cannot be taken for granted."

Caruana believes cheap funding from the central bank could make borrowers overestimate their repayment capacity, and he says fiscal authorities may want to delay consolidation. But without creating adjustments in the system to stave off future risks, the markets could become more dependent on the central banks, requiring them to continue to do more.

He said financial firms may be impacted due to a squeezing of their earnings capacity with low interest rates, causing them to take riskier bets.

Finally, he said, "A third risk is that policy could be miscalibrated or miscommunicated. The unprecedented size of their balance sheets has brought central banks into uncharted territory. With no history to rely on, they will find it difficult to calibrate and implement the tightening of monetary policy that will inevitably be required."

Click here to read Caruana's full speech on this topic.