The Bank of Thailand continues to place great emphasis on strengthening the regulatory framework and our surveillance capability in order to carry out prompt actions to adequately assess and deal with emerging risks in the financial system. We also have regular dialogues with top management of banks to discuss financial and business conditions, risk management, and issues relating to broader economic and financial stability. In terms of international standards, Thailand is on track to adopting the Basel II framework starting end of this year. For the move to Basel II, banks are aligning their risk management practices to prepare for the increase in requirements. In addition, the new Financial Institutions Businesses Act, which came into effect this past August, has also empowered the Bank of Thailand to fully enforce consolidated supervision, carry out prompt corrective action, and strengthen the governance of boards and top management. Ladies and gentlemen, Let me now turn to my second topic today, that is the medium-term plan to strengthen the efficiency and financial infrastructure for the banking system under the Financial Sector Master Plan Phase II. During the past five years, and under Phase I of the Financial Sector Master Plan, considerable progress has been made in strengthening the banking system, through consolidation of financial institutions, under the “One Presence” policy. There has been voluntary merger and acquisitions, among local institutions as well as with foreign partnerships, leading to fewer but stronger players, enhanced capital base, improved risk  4  BIS Review 133/2008  management and operational efficiency.

Mohammed Laksaci: Investment financing in Algeria Speech by Dr Mohammed Laksaci, Governor of the Bank of Algeria, at the Japan-Arab Economic Forum, Tokyo, 7–8 December 2009. * 1. *  *  Recent economic and financial developments  The deep and synchronized recession in advanced economies, which resulted from the deepening financial crisis during 2008 and which rapidly spread to many emerging and developing countries, appears to recede. Indeed, the second and third quarters of 2009 recorded the first signs of stabilization and even some signs of improvement in the global financial situation. The massive public interventions in many countries have contributed to reducing systemic risks and uncertainties in the financial markets. However, signs of malfunctioning in the financial sector remain and commercial banks are still dependent on exceptional budgetary support and central banks, in the context of gradual recovery in some advanced countries. Ensuring sustainable growth anchored to financial stability remains a major challenge. The spill over of the impact of the global financial crisis and recession to emerging and developing countries is well established in the first half of 2009, especially in countries affected by sudden capital outflows in the context of high exposure of their banking sector to international financial markets. In response, recovery plans focussed on supporting domestic demand have been implemented in a number of emerging countries, particularly in Asia, thereby contributing to stimulating commodity export recovery in Latin America and the Middle-East.