let government build infrastructure and help the poor and private sector trade and invest to economically develop the nation. the recent trend is that, central banks are now given the sole task of keeping price stability, and is given the independence to do that since if they have no independence, government will, at time ask it to do things that are in conflict to that sole function. thus the modern central bank is really akin to keeping peace in the nation through enhancing stability and it ’ s other people ’ s jobs to create wealth or turmoil as the case may be, the turmoil being a necessary instrument in coming to the right policies or at time the wrong ones or in an ever worse ending turmoil without apparent purpose as is so often the case in emerging markets. but it certainly is not now deemed the function of the central bank to be doing this sort of thing. so central bankers can now claim that they are basically trying to create peace and hopefully in a peaceful economy, there will be better prosperity than a wildly gyrating one. in a peaceful economy, growing stably at a high but sustainable rate, one cannot expect that there will be no criminals hidden deep down somewhere inside the society. a new instrument has therefore been added to the arsenal of monetary policy and financial supervision in the anti - money laundering legislations. the first anti - money laundering legislation was issued in 1970 by the us government. the mechanism is generally that cash deposit of more than the minimum stipulated amount would be examined. in the case of thailand, this legislation was issued in april and became effective in august 1999. the central bank participated fully in the draft and cooperates with its implementation. we have taken the option though that central banks should be trying to put up a good system for people to operate in rather than having another prime function of catching thieves and criminals, and in this legislation therefore a new independent government office has been put up dedicated solely to the pursuit of the articles of the legislation. we sit on the committee under the legislation as i have just said, and cooperate wherever we can to make sure its execution is effected and effective. this is another occasion where central banks contribute directly to peace in that criminal activities which by nature are not peaceful is kept to a minimum. speaking of criminal activities, vote buying in an election is also a criminal activity and although legislation makes it difficult for us to tackle this problem, we cooperate with the neutral national election commission in tracking down movement of funds and we have assigned an assistant governor to directly coordinate with this

before international liquidity standards were first discussed in basel. it has helped to shelter the italian banking system from the financial storm ; it continues to be necessary in the face of persistent market instability. convergence towards the basel liquidity standards, the details of which are not yet fully defined, will take place gradually, according to plan. in the first quarter of 2011, the profitability of the five largest banking groups improved somewhat with respect to a year earlier. the annualized rate of return on equity rose from 3. 0 to 3. 4 per cent. losses on loans decreased by 12 per cent, but they still absorb almost half of the banks ’ operating profit. the improvement is encouraging ; it should continue in the coming months when the recovery in lending reflects positively on banks ’ earnings. however, for the banks to return to satisfactory profitability it is essential that they persist with their efforts to reduce costs. some groups are taking steps to rationalize their networks ; these must be pursued with determination. a difficult round of labour negotiations awaits the banks, during which they must reconcile the need to reward the professionalism and productivity of employees with the impelling need to ensure that the evolution of costs is in line with the sector ’ s economic prospects. * * * there are favourable factors we can rely on to carry forward the consolidation of the public finances, overcome the emergency now overshadowing the economic outlook, and set italy on a path towards stable growth. we have the advantage that private sector debt and the country ’ s overall net foreign debt are both limited. our banks are sound ; they have emerged unscathed from the financial crisis that shook large foreign institutions. we possess fundamental resources that have always characterized the italians : individual initiative, ability to innovate, willingness to work. we must believe in our economy ’ s capacity for growth. we must find a common goal, above and beyond individual and factional interests. we must rediscover how to act for the good of all. bis central bankers ’ speeches