Thirachai Phuvanat naranubala: Preparing for rapid growth Speech by Mr Thirachai Phuvanat naranubala, Deputy Governor of the Bank of Thailand, at the Payment Card Business Forum, Bangkok, 28 June 2002. *  *  *  Distinguished delegates, ladies and gentlemen, I am pleased to be invited to address this meeting of prominent members of the financial community from the neighbouring countries of Cambodia, Laos, and Vietnam as well as some of the familiar faces from the Thai financial institutions. The dynamism of the payment service industry in this region is fast catching the attention of international community, and the future promises yet more potential. The theme of this seminar, "Preparing for Rapid Growth" is certainly very timely. I am sure the discussion will focus on both the return and the risks involved. But timely as it is, and growth is certainly a good thing, but when growth is rapid, there always is a danger. Thus, discussion on international best practices, risk management and good corporate governance at this early phase of growth is extremely important. These good things take time to build up. Economic growth in South East Asia This year we are seeing most South East Asian economies firmly back on the path of recovery. They are poised to regain their growth potentials. Luckily, the tragic event of September 11th has not pushed them off this steady course. This improvement is reflected in the improved sovereign ratings which has allowed many countries to re-access the international financial market with new bond issues.

In late 2008, when secondary market spreads had spiked and risk aversion was high, investors were uncertain as to when and how the market would stabilize. Non-recourse lending helped place a floor on investor losses, thus increasing market confidence broadly and facilitating the return of structured product investors. 2  Source: Morgan Markets. Note: This includes securitizations of auto loans and leases, credit card account balances, student loans, dealer floorplan loans, and business equipment loans and leases. Second, TALF loans have considerably longer maturities than the lending from the Federal Reserve’s discount window and its other temporary liquidity facilities. The term of the loans, which were either three or five years, was intended to more closely match the maturity of the underlying securities, as needed to encourage investors to return to the market. In addition, loans with longer terms were viewed as more effective, as financing would extend well beyond the expected end of the recession. The combination of these two elements – non-recourse loans and long maturities – was critical to the success of program. Without one or the other, investors would have had exposure to short-term swings in risk premiums in a time of extreme volatility, which would have likely limited participation and thus reduced the program’s effectiveness. A third notable feature of the TALF was that it was available to a wide set of market participants beyond the Federal Reserve’s traditional bank counterparties. This feature reflected the program’s broad focus on a financial market rather than a particular set of financial firms.