The BBC reports that the Bank of International Settlements, one of the few major economic institutions to forsee the financial crisis, has warned that monetary policy around the world needs to be normalized and that persistent low interest rates may prove counter-productive. It quotes them as saying:

The prolonged period of very low interest rates entails the risk of creating serious financial distortions, misallocations of resources and delay in the necessary deleveraging in those advanced countries most affected by the crisis.

Meanwhile, the FT's Norma Cohen and Chris Giles write:

The BIS report, however, warned policymakers not to expect a normal recovery because much of the pre-crisis growth had been unsustainable and capacity will have been destroyed for ever, particularly in finance and construction.

Jaime Caruana, general manager of the BIS, said on Sunday that the imbalances caused by unsustainable growth before the crisis “now need to be rectified, and as they are, growth is bound to be slow. Policymakers should not hinder this inevitable adjustment.

The emphasis there is mine. Now is it just me, or does the Bank of International Settlements actually seem to get it?