(2)  With the rapid development in technology, in the near future, apart from the known internet banking, we will see more of the "non-traditional" banking products. The providers of these services will not only be limited to banks, but also non-banks. Of course, the extent to which a non-bank provider can offer these new products and services depends on the rules and regulations of each country. To promote a fair competition between service providers that are banks and non-banks is a challenge for the authorities. BOT is in course of shifting from supervision by institutional basis to transactional basis which will enable us to overcome such a challenge. (3)  After the financial crisis, the need for strengthening supervision of financial institutions has been stressed as a major priority to BOT. The monitoring of financial institution systems becomes both more critical and more challenging for supervisors. The "Core Principles for Effective Banking Supervision" have become the most important global standard for prudential regulation and supervision. They are developed by the Basel Committee on Banking Supervision in cooperation with supervisors from noiQ-10 countries, providing the international financial community with a benchmark against which the effectiveness of bank supervisory regimes can be assessed. IT supervision is also included in the Core Principles such as CP9 (MIS), CP 11 (Information System to comply with Country Risk and Transfer Risk), CP13 (Contingency Plan, MIS, Business Resumption Plan) and CP21 (verification of information from bank records by on-site examination and/ or external audits).

Therefore, it is unlikely for unit labor costs to be subject to cost pressures in coming months. In sum, monetary conditions remained supportive of domestic demand in the fourth quarter. Private demand recovered more rapidly amid increased consumption and investment spending, therefore aggregate demand conditions provided less support for disinflation than suggested in the October Inflation Report. Nevertheless, I would like to emphasize that the recent policy measures are expected to bring domestic demand back on to a more moderate growth path in the upcoming period. Our inflation forecasts are based on the projections of the Medium-Term Program (MTP) as was the October Inflation Report. The use of a large fraction of the additional increases in tax revenues as a result of the stronger-than expected economic activity in the last quarter of 2010 has been the primary driver of the slight upward revision to output gap forecasts. However, as the budget balance remained largely in line with MTP targets, the medium-term fiscal policy outlook was barely changed. Therefore, our forecasts are based on the assumption that the primary expenditure-to-GDP ratio would decline gradually, the debt-toGDP ratio to decline further, and the risk premium to remain broadly unchanged over the forecast horizon. Moreover, I would like to note that we assume tax adjustments to be consistent with inflation targets and automatic pricing mechanisms. Now I would like to brief you about the assumptions underlying our inflation forecasts. The developments since the reporting period of the October Inflation Report urged us to revise our assumptions underlying our forecasts.