The second source of resilience comes from the strength of our prudential and supervision of financial institutions. In this regard, the Bank of Thailand’s capacity and performance in supervising financial institutions has been assessed against international best practices in the context of the joint IMF/World Bank Financial Sector Assessment Program or FSAP. 2  BIS Review 63/2008  Indeed, the outcome of the FSAP assessment was very satisfactory, validating our observance of international best practices. Moreover, the assessment results also strongly endorse the policy-making frameworks and transparency. As you may be aware, the new Financial Institutions Business Act (FIBA), which governs the framework and conduct of financial institution supervision, is designed to capture the international best practices of financial institution supervision according to Basel Core Principles (BCP). With this law, the BOT can undertake consolidated supervision of financial conglomerates, together with prompt preventive and corrective actions, macro-prudential measures, and measures to improve consumer protection. Overall, our goal is to ensure that our regulatory and supervisory responses keep pace with the financial intermediaries and the products they offer. In this endeavor, the Bank of Thailand has put emphasis on robust stress testing, enhanced counterparty risk management, and safe and efficient market infrastructures. This leads me to the third source of resiliency. This is the continuous improvement in our financial infrastructure, legal as well as information, and the intermediary functions of financial institutions within the economy.

Tarisa Watanagase: Thailand – its resiliency and medium-term challenges Address by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the Thailand Investment Forum, Euromoney Conferences, Bangkok, 13 May 2008. *  *  *  Distinguished Speakers and Guests, Ladies and Gentlemen, I am delighted to join you at this gathering of prominent members of Thailand’s public and business sectors. This year’s Thailand Investment Forum by the Euromoney Conferences comes at an opportune time when we see clearer signs of the Thai economy gaining growth momentum, supported by government policy measures and revival of private sector confidence. Nevertheless, there are also imminent downside risks predominantly from external fronts, which could hinder the continuation of this positive trend. I will focus the first part of my talk on Thailand’s resiliency to achieve healthy growth in 2008 and beyond. The second part will highlight key issues on competitiveness and strength of Thailand’s economic future in the face of trade and financial globalization. Judging from the list of experts from whom you will be hearing over the next two days, I would like to share with you my perspective from the policy making side. Ladies and Gentlemen, Thailand’s record of economic resiliency to adverse shocks and uncertainties in the past should clearly demonstrate the strong underlying fundamentals. In 2007, notwithstanding political uncertainties which dented confidence since September 2006, the Thai economy grew by 4.8 percent. Overall, the main growth driver continued to be net exports, which contributed to almost 60 percent of the overall GDP growth.