New money market platform goes live The new electronic money market trading platform for repo transactions began operating at the end of February and has completely replaced the old system. The new trading platform’s name, CO:RE, is short for “Collateral & Repo”. The technical changeover to the new system went smoothly for all parties involved. The new trading platform gives more than 160 national and international participants a single access point for procuring and investing Swiss franc liquidity as well as managing collateral (i.e. pledged securities). It also enables the SNB to carry out its open market operations on the money market. After more than 15 years of service, the system which CO:RE has replaced was no longer able to meet the needs and technical requirements of market participants. As you know, the SNB is currently implementing its monetary policy using exceptional measures – negative interest on sight deposits and foreign exchange market interventions. In these circumstances, standard money market instruments – repo transactions and SNB Bills – are not being deployed. It is nonetheless important that counterparties are in a position to carry out these transactions seamlessly. The SNB therefore conducts small-volume tests. When a series of tests conducted in autumn 2014 revealed that some market participants were no longer sufficiently familiar with operational implementation, a second round of tests was launched in May 2016. This exercise will be concluded at the end of July. These kinds of test operations, which help ensure counterparties’ operational readiness, are greatly appreciated by market participants.

As banking supervisors, we can leverage off the auditors’ significant experience in testing for the adequacy of an institution’s internal control environment, as we begin to implement this risk-based framework. Second, external audits help to ensure the accuracy of financial statements that are provided to the public, which in turn helps to promote market discipline and foster a safe and sound banking system. Ladies and Gentlemen, Now, I would like to present our experience with external auditors from both the regulatory and supervisory perspectives. First on the regulatory side, the value of this relationship was initially recognized in 1962 when the Commercial Banking Act provides the Bank of Thailand with the authority to accept or oppose the appointment of a bank’s external auditor. Based on this act, the framework for external auditor qualifications and reporting requirements to the Bank of Thailand was issued in 2000, after extensive consultations with the Institute of Certifed Accountants and Auditors of Thailand (ICAAT), the Securities and Exchange Commission (SEC) and other relevant regulatory bodies. Let me provide some specifics on auditor qualifications with respect to our law. First, qualifed auditors must never have had their auditing license revoked or suspended by the auditing licensing body. Second, auditors that are not authorized to audit entities under the supervision of the SEC or other government agencies are not permitted to audit banks. Third, the Bank of Thailand prohibits any external auditors to consecutively serve a bank for more than fve years.