·  Third, to work with the management of the state banks and commercial banks to facilitate their resumption of lending without compromising the banks’ own risk management and the Bank of Thailand’s own supervisory standards. On our part, the Bank of Thailand has improved the credit information system through fostering the establishment of credit bureaus, which provide the much-needed infrastructure for the resumption of new credit. Meanwhile, we will continue to adhere to the best practices in prudential standards, and look to further improving the standards. Let me now turn to the third challenge: Rebuilding our financial architecture. This is an area that the Bank of Thailand takes leadership role to strengthen the soundness and efficiency of the financial institutions. Our leadership must lead to outcome which makes practical sense, measures up to international best practices, and must be market-oriented and suitable to Thailand. So far, we have laid down necessary groundwork to tackle short-term difficulties, such as the persisting non-performing loan problems, the lack of credit growth, or the restoration of financial sector soundness. Long-term prosperity however requires more. It requires a new financial architecture and corresponding market infrastructures to foster competition and efficiency while ensuring a nonrecurrence of past problems. Specifically, in the world where financial innovations, economic integration, and technological advancements bring nations and markets closer and define a new paradigm for competition for financial service industries, the rebuilding of our financial architecture becomes vital for our long-term successes, if not survival. Given such a challenge, which direction are we heading?

Early evidence from monetary aggregates shows a very large increase in money growth in March: the annual growth rate of the broad monetary aggregate M3 stood at 7.5 percent, 2 percentage points higher than in February (Chart 13). This is by far the largest monthly increase since the creation of the euro. In absolute terms, the monthly flow was € billion. For comparison, the largest monthly flows until now were recorded in March 2007 and October 2008 at around € billion. https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp200519~e5203d3520.en.html  9/14  5/19/2020  Pandemic central banking: the monetary stance, market stabilisation and liquidity  Similar developments were observed in the narrow monetary aggregate M1. This aggregate continues to drive money developments, reflecting the persistently low remuneration environment and the current high level of economic uncertainty. The annual growth rate of M1 increased to 10.3 percent, up from 8.1 percent in February (Chart 13). Chart 13 Developments in M1 and M3 (annual percentage changes)  Source: ECB. Notes: Monthly data. The latest observations are for March 2020. Lending to the private sector was the single largest source of money creation in March, driven by loans to firms. The annual growth rate of loans to firms increased to 5.4 percent in March, up from 3.0 percent in February (Chart 14). By contrast, the annual growth rate of loans to households moderated somewhat: it declined to 3.4 percent, down from 3.7 percent in February.