Indeed, balanced wage increases in line with these determinants would contribute to the lasting achievement of our medium-term inflation target and, also, to preventing the emergence of undesired second-round effects. 9  In the medium term, which is the relevant time frame for monetary policy, the expectation that inflation will moderate is maintained. Indeed, despite the evident short-run upward pressures on inflation, the most recent survey and market-based indicators keep pointing to a medium-term outlook for inflation rates in the euro area broadly in line with our 2% target. Wage growth also remains moderate. Against this backdrop, in recent months the probability of inflation stabilising at around 2% in the medium term has clearly increased but there is no perceived risk of it remaining persistently above that level at this stage. In any event, the outlook for inflation is admittedly highly uncertain. Geopolitical tensions could lead to further increases in energy prices, which could feed back into wage rises and an inflationary spiral. Other matters, such as the resolution of supply bottlenecks, are also subject to great uncertainty. All in all, the risks to inflation are on the upside, particularly in the near term. 10  I would also like to stress that the economic situation in the United States is different from that in the euro area. First, as I said before, medium-term inflation expectations in the euro area remain anchored at around our 2% target level, while in the United States these expectations lie significantly above 2%. US inflation numbers have also been higher.

In addition financial market participants as well as regulators are facing the global challenge of the new economy and technological revolution. The new technological revolution is pushing for change everywhere in the world, and with no concern for those in need of time to heal the wounds inflicted by crisis. It has become an inevitable development which needs to be embraced with the right attitude, mindset and understanding. The new economy in itself poses challenges, not exclusively to financial service providers, but to regulators, business operators and the financial industry as a whole. The challenge, on this last aspect, is particularly crucial to the government sector; for they need to make sure that the legal, regulatory and supervisory framework are there to create the right competitive environment and operating conditions. This is to ensure that when their own private operators are ready for the technological challenges of E-banking, internet-broking and the electronic trading platform, then the appropriate legal and regulatory framework is there, rather than becoming an obstacle to development - by which time we may no longer be able to catch up with major global players. In the world of E-commerce and trading, banks have become important intermediaries as the operator of the payments system, to facilitate the payment for the goods and services which are being traded on-line. As regulator of the commercial banking business, the Bank of Thailand is working in earnest to support the development of the country’s payment system, by both the public and private sectors.