tarisa watanagase : the road ahead for central banks – meeting new challenges to financial stability luncheon talk by dr tarisa watanagase, governor of the bank of thailand, at the foreign correspondents club of thailand, bangkok, 20 july 2010. * * * distinguished fcct members and guests, ladies and gentlemen, first of all, i would like to thank the fcct board for inviting me to deliver this luncheon talk as part of the club ’ s newly established speaker ’ s lunch series. to this, i am honored as well as delighted to be back. it was exactly two years ago when i was here for the club ’ s dinner program in july 2008, and let me tell you that i very much enjoyed our q & a session then. i certainly look forward to participating in such a lively exchange again this afternoon. the topic of my talk today is “ the road ahead for central banks : meeting new challenges to financial stability, ” in which i will share with you my views on the roles of central banks regarding the maintenance of financial stability, with particular reference to those at the bank of thailand during the past few years and going forward. this talk will be divided into three parts. the first part will be about the changing global view on financial stability policies as a result of the recent global financial crisis. the second part will be a summary of what the bank of thailand has done with regard to the maintenance of thailand ’ s financial stability. the final part will be a discussion about the challenges ahead. ladies and gentlemen, since my previous fcct address, things have changed dramatically. two years ago, the main policy issue surrounding the economy was the sharp acceleration in inflation due to drastic increases in oil prices. two months after my talk, starting with the fall of lehman brothers, the world went into the deepest recession never seen since the great depression. thailand was not spared, as the thai economy last year experienced negative growth for the first time since the 1997 crisis. in tandem with the slowdown of the global economy, oil prices collapsed and inflation was no longer an issue. over the past two years, policy focus would be on how to restore the stability of the global and individual country ’ s financial systems and how to prevent such a systemic crisis from happening in the future. in other words, the spotlight has turned from price stability to financial system stability, or in short, financial stability. 1 the global financial crisis has a significant impact on central banks ’ thinking of

phase of the financial institution electronic data submission project. from today onwards, financial institutions ’ submission of over 200 hard copy and crf reports would be substituted by merely 41 data sets. consequently, this would more or less lessen the burden and make it more convenient for financial institutions to report data to the bank of thailand. the second phase of the project, which is scheduled to start on 2nd january 2004, would involve the implementation of the electronic data submission on financial institutions ’ foreign exchange transactions. whether the project could meet the setforth schedule very much depends upon continual support from every participating financial institutions. the third phase of the project involves the economic data system and is scheduled to commence its operation on 2nd july 2004. each set of economic statistics would be compiled by its corresponding official organizations while the degree of success of the electronic data transfer and submission would mostly depend on the readiness of the government agencies. at present, there are quite a number of project initiatives which have already been implemented ; for instance, the emis project, which is a joint project in conjunction with the fiscal policy office, ministry of finance. the project would link databases of 4 participating agencies ; namely, the fiscal policy office, the national budget bureau, the bank of thailand and the national economic and social development board ( nesdb ). with this regard, the bank of thailand would inform about the data linkages with the fiscal policy office, accordingly. and finally, i hereby would like to take this opportunity to thank all financial institutions, the bank of thailand executives, all staff in the dms project, the ibm ( thailand ) company limited including all related officials who greatly help push this project along the way throughout its first phase. i also hope to see this type of mutual cooperation continue until the project becomes fully completed. now, it ’ s the right moment, i hereby would officially commence the financial institution data submission and transfer under the data management system.