. though much work is required on the corporate sector in the march toward modernization of the thai economy, the government and the central bank also have vital roles in maintaining stable economic environment and providing the required infrastructures to allow the private sector to drive forward to create wealth and prosperity. several long - term plans have been made in the past couple years. on the macroeconomic front, the bank of thailand has adopted inflation targeting as a framework of our monetary policy since may 2000. it may be a little too early to claim our success, but the results thus far have been encouraging. long - term interest rates of the interpolated 14 - year government bonds were reduced from 8. 3 percent at the beginning of 2000 to currently at 6. 1 percent. inflation remained subdued and will stay within the target range during the next two years. the maturity of state enterprise debentures offered in the market increased from a maximum of 7 - year in 1998 up to 20 years in 2000, reflecting greater confidence on the long - term economic stability. on the financial system level, we are drafting a new financial system master plan in cooperation with stakeholders and representatives from other regulators within thailand such as the sec as well as the department of insurance. this will provide a new and vibrant financial system whose survival will be judged by the value added it creates and delivers to the clients. and these will ensure adequate provision of financial services as required by the new economic environment. as for the current economic policy, we are not yet out of the crisis. the economy recovered from a 10. 8 percent contraction in 1998 and posed a 4. 2 percent and 4. 3 percent in 1999 and 2000, respectively. nevertheless, the global slowdown, particularly from our main trading partners such as the us and japan who account for roughly 35 percent of our exports, have complicated our tasks. here, it is the lack of confidence in the overall economic conditions that is the main problem that prevents the resumption of business lending. earlier this week, the government announced its plans to put in place additional fiscal stimulus for the fiscal year 2002, as well as programs to stimulate domestic spending. these include new measures to utilize excess liquidity in the banking sector to further enhance economic activities, to increase investment through a matching fund, as well as to retrain the workforce. these should provide the much - needed economic stimulus to the corporate sector. prosperity of our nations rests on the hard work of the corporations, for what really matters in the long run is your

with various liquidity support in interbank markets globally. this potential trend, of course, would also depend on accounting standard and a regulation on fair valuations, which itself is still under much debate. thus, strengthening of risk management and supervision is important. indeed, the importance of this is highlighted by the rebound in many regional stock markets as well as upward pressure on the currencies. i have also observed from some reports that, within the many financial centres, the recent return generated by fx traders have been strong, while hedge funds, thought to have seen end of days, are starting to come back to life. we may be heading in for a sporadic period of increased risk - appetite. at the same time, many corporate borrowers, particularly the large conglomerates which used to fund from global market, may switch to domestic market, due to retrenchment of international debt market, as well as still heightened risk - aversion and retrenchment of global banks. this would be at the same time as increasing issuance of local sovereign debt to finance stimulus package. in the early stage of recovery, risk of crowing - out may not yet be high, but even at this stage, the investment portfolio of local financial firms may shift significantly, and may likely see increasing concentration risk due to increased exposure to major conglomerate which used to source overseas funds. but as momentum of recovery gathers pace, competition for funds and risk of crowding - out rises. therefore, even abstracting from challenges of reshaping regulatory framework, managing the risks from the current market environment is demanding. uncertainty and risk remains high, and i believe there are four key risk factors we need to focus on. first, sustainability of nascent “ green shoot ” global recovery remains a subject of financial market speculation, and will continue to drive trading position and volatility. the sign of recovery in global economy appears to be revealed as “ green shoots ” after a deep recession. this recovery is credited to a wide range of public intervention in major economies, which has boosted the subdued private demand as well as reduced uncertainty especially in the financial markets. however, the sustainability of the nascent recovery is yet to be confirmed, as the financial systems in major economies have not been fully repaired. secondly, the timing and speed of the unwinding process of public stimulus packages have yet to be settled, the so - called “ exit policy. ” thirdly, the difference in speed of recovery between major economies and emerging