In effect, a “neutral” policy stance is one where monetary policy neither has its foot on the brake nor is pressing down on the accelerator. Although the concept of the neutral real federal funds rate is exceptionally useful in assessing policy, it is difficult in practical terms to know with precision where that rate stands.
Furthermore, there is a risk that national authorities may design and manage national MAP regimes in a way which, although rational from a domestic perspective, could have undesired consequences. For example, national authorities may relax constraints on lending in order to stimulate the expansion of the domestic banking sector, with potential adverse spillovers for financial stability in other markets.