For a period, our banks were also caught up in the global de-risking phenomenon which saw banking relationships with legitimate businesses indiscriminately terminated across the board. Money changers, remittance service providers and even well-established and managed nongovernment organisations, which were providing legitimate services to the community, had their accounts unilaterally closed without any effort made to establish legitimacy. Another example is in the area of responsible financing. Despite broad flexibility provided on income verifications, some banks were initially quick to reject loan applications from borrowers based on a set of very narrowly defined documents that were accepted to prove incomes. This largely excluded non-salaried individuals from accessing loans. This was only later reviewed by banks to accept other forms of documentation and borrower engagements to demonstrate a borrower’s ability to repay. In certain circumstances, it is entirely appropriate for a compliance function to draw a clear line in the sand, where further risks should not be taken. For example, where there are reasons to suspect that firms or individuals may be involved in illegal activity, banks must not deal with such parties and must work with the authorities to limit public harm. Despite being a first line of defence against illegal activities through banking relationships, banks have often been too slow to react. This has resulted in heightened risks of losses to investors, not to mention substantial damage to the reputation of the banking industry at large.

Monetary policy must be conducted with caution as to not contribute to further build-up of financial vulnerabilities. Furthermore, amidst the prolonged period of low interest rate and the increasing search-for-yield behaviors, it is our view that supervisory coordination is increasingly imperative for effective risk monitoring to make sure that the regulations across different regulators are broadly aligned and that financial 4  activities cannot simply move from a regulated to an unregulated umbrella. This is reflected through our close collaborations with other regulatory bodies such as the Securities and Exchange Commission (SEC) and the Office of Insurance Commission (OIC). Ladies and gentlemen, While we have adequate external buffers to withstand short-term vulnerability in the global market, what would ensure the economy’s stability and resilience in the longer-run are productivity-enhancing infrastructures and ecosystem. This is crucial for the country’s competitiveness in the years to come. I am delighted to say that we are on the path of productivity improvement. With the limited time I have, it is difficult to do justice to all the projects that have been initiated. Some of the most notable examples are the Eastern Economic Corridor (EEC) and transportation and digital infrastructure projects that have been long-overdue. On our side, the Bank of Thailand is doing its part to develop infrastructure and ecosystem needed for the ongoing transition towards the digital economy. Under the e-Payment Masterplan, we, together with the Ministry of Finance and the Thai Bankers’ Association, launched PromptPay, which has allowed real-time fund transfers among individuals and businesses.