people around him for help. one of the lessons that 1 have drawn from the story is that immature adults, when presented with easy access to credit, may form the habit of spending beyond their means until they themselves become a burden on their community and society. a more recent story that comes to mind involves two factory workers who earn approximately 6, 000 baht per month. both were invited to apply for a credit card but only one signed up for the offer. this worker first used his credit card to purchase a tv set, which he could easily finance with his salary. nevertheless, the tv was followed by a washing machine and a motorcycle, which eventually pushed his monthly debt payment to exceed his income. as he exhausted all of his savings, and could no longer borrow from family and friends, his belongings were repossessed by the creditors, and finally he had to quit his job in hopes of running away from his remaining creditors. the story highlights a dangerous combination in the fabric of thai society and that is low - income earners who lack financial literacy, or the ability to effectively manage their finances, but yet have very high marginal propensity consume. they in turn are more susceptible to unknowingly consume beyond their means, and like my previous story, become a burden an society. that burden is further intensified by the difficulty in finding and obtaining new employment. this probable risk demands that stakeholders take a more cautious approach to ensure quality growth in thailand ’ s consumer finance market. ladies and gentleman, in reality there are more than one type of savings behavior in the world, but most importantly the savings behavior should be appropriate for the developmental needs of each country. in a developing economy such as thailand, the customary savings behavior is to save first and spend later. developing economies can and should benefit from this type of behavior since it allows for vital investments to be madc using domestic savings, thereby lessening reliance on extemal capital inflow, while at the same time promoting an economically viable savings - investment gap. on the other hand, the savings behavior of the west and developed economies tend to lean toward spend now save later. this type of behavior is practicable in western countrics due to many factors that can be summed up under the heading of high level of economic development. the existence of social welfare systems, mature capital markets, diversified economy, and highly educated workforce are a few factors that allow such countries to be able to grow under a relatively low savings environment. without such

this path over the past few months – one of the items on its “ to do ” list for 2016 is to finalise the basel iii reform package before the end of the year. and things are moving along swiftly – the fundamental review of the trading book ( frtb ) was endorsed by the central bank governors in january, which means that the new market risk framework will take effect in 2019. work is also ongoing to address the problem of excessive variability in risk - weighted assets by the end of 2016. the basel committee has set its sights on two outcomes : removing internal model approaches for certain risk types, and placing constraints on the use of internal model approaches for credit risk, in particular through the use of floors. in parallel, the standardised approaches for credit and operational risk are reviewed. another issue the committee is currently working on is the final design and calibration of the leverage ratio, so that it can be implemented as a pillar 1 measure by 1 january 2018. to make one thing clear : the regulatory projects mentioned do not target on imposing further burdens on the banks – which would mean first and foremost higher capital requirements. in that regard, i highly appreciate the overall impact study the basel committee will conduct this spring, which will give us precious hints on how all the regulatory measures interact and should be calibrated. i think the basel committee is on the right track, and finalising the basel iii reform package in 2016 is my regulatory priority in 2016. bis central bankers ’ speeches while we may rightly expect much of the basel iii framework, it is no secret that higher capital standards and new liquidity requirements are not the only toolkit available when financial stability is at stake. that ’ s why the basel iii regime has been flanked by a host of other regulatory projects that have been launched in response to the financial crisis : the “ too big to fail ” issue, sovereign exposures and the shadow banking system are just three regulatory projects i could name. this is neither the time nor the place to explore these regulatory projects in any great detail, of course. but there is one point i really would like to stress. all the regulatory projects i mentioned just now call for international cooperation – and not just on the basel committee for banking supervision or the financial stability board, where it works very well. if we as national regulators do not coordinate our approaches to regulation, we will create a fragmented financial system that opens up vast opportunities for regulatory arbitrage. so working together – as regulators