auditor qualifications with respect to our law. first, qualifed auditors must never have had their auditing license revoked or suspended by the auditing licensing body. second, auditors that are not authorized to audit entities under the supervision of the sec or other government agencies are not permitted to audit banks. third, the bank of thailand prohibits any external auditors to consecutively serve a bank for more than fve years. fourth, the banks are accountable for having their external auditors submit their audit program to the bank of thailand every year and for allowing the auditors to supply all documents to supervisors upon request. in addition, the auditors must report the banks ’ material non - compliance with any laws or regulations derived from the commercial banking act as well as any material internal control deficiencies. if any auditors fail to meet these requirements, the bank of thailand will either oppose the appointment of such auditors and / or revoke their existing appointment. on the supervisory side, the greatest reduction in supervisors ’ workload is in internal control and irregularities assessment. our supervisors use these two reports to determine the breadth and depth of on - site examination planning. for example, if supervisors determine that the external auditors ’ work on internal control assessment is adequate, our examination efforts in this area may be reduced. delegation of these two tasks aligns with the basel guidelines, as they are both within the external auditors ’ technical and practical competence. the bank of thailand has long recognized that to derive the greatest benefits from external auditors, the auditors need to have a good understanding of not only prudential regulations, but also key supervisory concerns at the client banking institutions. in this regard, the bank of thailand meets with external auditors at the beginning of each year, in order to exchange views on common areas of concerns and to gain greater insights on the planned audit scope for the coming year, for example, the quality of risk management, the reliability of assigned collateral and foreclosure values. in addition to ongoing meetings with external auditors, there are periodic discussions at the agency level between the bank of thailand and the accountancy bodies. regularly, the bank of thailand seeks comments from the institute of certifed accountants and auditors of thailand prior to the issuance of new regulations. likewise, the bank of thailand ’ s supervisors are regularly invited to be a member of the auditing standard committee whose responsibilities involve the development and improvement of thai auditing standards. in summary, the bank of

monetary policy must reconsider rebalancing and carefully re - examine all the options, given how the balance of risks has significantly shifted toward growth and away from inflation. we are therefore faced with three key questions. first, how will the euro crisis play out? second, can thailand grow through the euro crisis? and third, what should monetary policy do? let me now turn to the first question. how will the euro crisis play out? in my view, the short answer is this. the euro zone will mostly likely remain intact and avoid a liquidity seizure similar to the one seen during the lehman crisis. however, the euro zone will face a slow and difficult recovery. let me qualify my view by saying that the reality is much more complicated. so let me go quickly over some salient details of the euro crisis and its current impact on asia. a great deal of uncertainty, much of it induced by lack of policy clarity, surrounds the euro crisis. this is reflected by how global fx markets have been in turmoil as investors fled euro and asian emerging markets assets for safe havens. the thai baht was not spared from this turbulence and experienced high volatility and bouts of weakening pressure. however, investors eventually returned to emerging markets in asia as yields in advanced economies moved lower and asian fundamentals improved amid slowing inflation pressure. in thailand, government bonds, in particular, have proven attractive. in fact, foreign participation in both bond and equity is now above pre - lehman levels. however for equity, the rate of return was bis central bankers ’ speeches slow of late ; net inflows were negative last year but are now slightly positive for the second half of this year. amid all this turbulence, all this back - and - forth, the baht fluctuated in tandem, first depreciating in the first quarter of the year up until july and then appreciating somewhat. this trend was punctuated by bouts of volatility each time euro policy faced implementation difficulties once push comes to shove and member nations have to make the difficult tradeoff between national interests and supra - national interests. but back to the question of how the euro crisis will play out. no doubt the drama of policy uncertainty will continue. but what will be the end - game? broadly speaking, we envision two scenarios : an extreme scenario and a baseline scenario. in the extreme scenario, prolonged political gridlock over policy leads to a liquidity seizure. failure to ratify the