reduces market inefficiencies. these considerations mean that financial development must be accompanied by a robust policy framework that places financial stability as a high priority. this is indeed the practice followed by the bank of thailand. monetary policy on that note, let me briefly discuss the role of the bank of thailand in this new environment. our key contribution to the long - term economic development efforts is to provide a stable macroeconomic and financial backdrop, so that the prosperity can be attained without interruptions. the current priority for monetary policy is to ensure a robust economic expansion, as the recovery remains in its infancy stage. the monetary policy committee ( or mpc ) has therefore been maintaining the policy interest rate at a relatively low level, in view of supporting the economy during this transition. currently low inflation, subdued global commodity prices, and stable external environment, afford us policy space to focus on the growth objective for the time being. nonetheless, the committee will also continue to monitor any risks to financial stability, given that the policy rate has been bis central bankers ’ speeches low for some time. businesses and households should see the current monetary policy stance as conditional on the economic outlook and financial conditions, and prepare themselves for possible turns of events. distinguished guests, while the ongoing economic recovery is a welcomed development, we must not lose sight of the much - needed reforms. failing to do so would have repercussion for the economy ’ s potential growth, a critical cornerstone for long - term well - being of the nation. thailand stands at a crossroads, and the road ahead may not be paved with gold. but given a skillful maneuvering of the private sector and our cooperation, i am confident we will reach our common goals. thank you. bis central bankers ’ speeches

is that this is an area which is deserving of greater discourse. evaluating the effects of the banking reforms will be a key exercise. one set of issues revolve around whether the reforms are having the intended outcomes or, on the other hand, whether there are unforeseen and undesirable effects. this will involve an assessment of banks ’ behavioural responses, whether there are new forms of arbitrage strategies, and the spillover effects on the broader economy. cross - border lending to developing economies one example relates to the impact on cross - border lending to developing economies. there are studies that indicate that some global banks have reduced their presence and activities in developing economies as part of their business review, and some have attributed this to the banking reforms. establishing a clear, causal link between the declining trend in crossborder bank loans to developing economies and the post - crisis reforms will be helpful, if possible. such investigations can support the basel committee ’ s work on a full, timely and consistent implementation of the reforms globally. the increasing role of market - based finance in credit provision the decline in bank inflows to developing economies has been partially offset by these 2 / 5 bis central bankers'speeches economies relying more on market - based finance, or non - bank financial intermediation. in my view, this is a positive development since a more diverse funding system comprising bank - based finance and market - based finance can possibly better meet the changing needs of the real economy. 17 but the increased prominence of market - based finance has also led to some concerns that large redemptions from open - ended funds can potentially pose liquidity risks and hence destabilise financial markets. international organisations and standard - setting bodies such as the financial stability board ( fsb ), international organisation of securities commissions ( iosco ) and basel committee have sought to assess the potential financial stability risks posed by market - based finance. the fsb, for example, developed a set of policy recommendations to address structural vulnerabilities of open - ended funds, and iosco is reviewing these recommendations. 19 there can be other related areas that merit further investigation, including from academia. for example, the interaction between market - based finance and traditional asset management activities, and the effect on underlying markets in which these are invested. evaluating the impact of macroprudential policies a key element of the basel iii reforms is its macroprudential framework to assess new system - wide risks and the use of a counter