The need for central banks to have a broad range of instruments, including macroprudential measures, to achieve financial stability policy objectives is now generally accepted. Focus has also been on the efficacy of different policy instruments that are needed to preserve financial stability, the structure and design of decision making frameworks and the accountabilities in regard to financial stability. For Asia, these considerations have been very much a part of the evolution of financial stability frameworks in the region in this recent decade, in particular following the Asian financial crisis. By virtue of being also responsible for bank supervision, the majority of Asian central banks have a clear mandate for financial stability, whether implied or explicit. In the case of Malaysia, this has supported the close coordination of the macro and micro surveillance functions, and more comprehensive assessments and analyses of the interactions between monetary and financial stability policies. Many central banks in the region also have considerable experience in implementing macroprudential measures, such as lending concentrations, loan-to-value limits and some form of “dynamic” reserving or provisioning policies. The intensification of regional monetary and financial cooperation among central banks in the Asian region has also served to strengthen regional surveillance and crisis management arrangements, as well as in the supervision of financial institutions with cross-border operations in the region. As Asia rises and expectations increase, the two billion Asians now at the margins of the consumption economy will radically transform global demand and supply for limited  2  BIS central bankers’ speeches  resources.

This is so that risks from potential concentration of market power and financial instability are minimised. The final pillar aims to fill the gaps in institutional, including legal and information, infrastructure that are necessary for an efficient and modern financial system. We will be looking at the legal framework and other measures that would support a more effective functioning and supervision of financial institutions. These include sound credit culture (e.g., bankruptcy and foreclosure laws) and implementation of international best practices, such as new international accounting standards. On the information side, efforts will focus on the information infrastructure that would assist financial institutions in pricing and managing risks better. Areas for improvements are, for example, the operation of the Credit Bureau, rating agency, and more complete data on key economic sectors such as the real estate and housing market, etc. BIS Review 54/2008  5  On the whole, while the policy recommendations will largely cover BOT-supervised financial institutions, those related to other types of financial institutions and broader financial markets can also be addressed if they are deemed to be systemically important. Ladies and Gentlemen, In closing, allow me to emphasize once again that Thailand’s record of economic resiliency to adverse shocks and uncertainties in the past should clearly attest to the strength of our underlying fundamentals. The US and Thailand are long-time partners, and I need not mention how crucial it is to both our economies that we strengthen our trade and investment partnership in the years ahead.