for a couple of reasons. first, in terms of the transmission of a global yield spike to domestic bond yields, thailand's bond markets rely on non - resident financing less than other countries. therefore, transmission from a global yield spike to a local yield spike is not likely to be as sharp as one might see in other page 2 of 9 countries. however, even if there were to be a local yield spike, transmission to the real economy is also likely to be muted as 90 percent of the private sector financing in thailand is still bank - based. meanwhile, only ten percent of the private sector financing relies on bonds, which consists mostly of large corporates that are quite solid in terms of their balance sheets. nonetheless, a local yield spike as a result of a possible taper tantrum would not have a high impact on banks. this is because, in thailand, close to 97 percent of banks are financed through deposits and not through the wholesale market. this indicates that the thai economy is likely to be much more resilient to the possibility of a taper tantrum than other countries. the second factor that indicates our resiliency is our banking sector. our banking sector remains sound. capital ratios are high with the bis ratio at 20 percent, overall liquidity remains high, and provisioning levels are also high relative to npls. thus, the banking sector remains highly liquid and very strong by most measures. the banking sector has also continued to function throughout the crisis by extending credits and we have seen credit growth in most areas with one notable exception which i will discuss later. this indicates that the banking sector is acting as a shock absorber and not a shock amplifier. the third area of resiliency is on public finance. our public finances remain sound even though the public debt to gdp ratio has increased in line with other countries during the crisis. however, for thailand, the public debt to gdp ratio remains reasonable, standing in the high 50s percent as a share of gdp. this indicates that the government has room available to engage in additional fiscal stimulus if it deems necessary. furthermore, the ability of the country and the government to engage in more fiscal firepower includes the fact that 10 - year borrowing rate on government debt remains relatively low. the government is able to borrow at less than 1. 7 percent, a much lower borrowing cost than other countries in the region. public finances are also perceived to be sound, where risks are relatively low and liquidity is high. given

can never make sure of hiring or promoting the right person, and therefore one should plan on an easy change of personnel to get the best results. let me make a controversial statement on the platforms of the various political parties in terms of spending more and taxing less. we routinely run the general equilibrium model and the inflation targeting model as well as market implied models or mime, a technical word that is used for trying to find things out from people ’ s normal actions that could be captured in a data system. we also, of course, do single equation estimates as well as pure intuition from graphs and tables and such things. our staff is generally of the opinion that increased expenditure and tax reduction of moderate amounts will not destabilise the economy. this is predominantly because the economy is still very docile with a capacity utilisation stable for quite a while now at 58 %. cost push inflation from the exchange rate and the oil prices are now substantially absorbed or have been passed on, so cost push also is not presently much of a factor. the important thing though is how to make expenditure useful and constructive in the long run without too much leakage. the important thing is how to make tax cuts reasonable and directed towards the areas where people benefiting from the cuts could utilise it for a spate of new investment. if this were to happen the debt to gdp ratio might not increase significantly due to the resulting increase in gdp over the long term. with abundant liquidity and low interest rates, this is not just a time for a general tax cut for its own sake, but a program must be designed for it to be directed to where investment could best be made. in a way, this is not as easy as it seems, because generally we have been over investing and have great overcapacity. but it ’ s also not as hard as it might look. there are only a few areas that are really doing well, and benefits from the cuts could be directed there. the problem is how to make it fairly just, so that not only the good players that are already there benefit, but new players should be brought in to these all important areas. ladies and gentlemen, i have been giving you some of my thoughts on the economy. thoughts that are spotty and veer obviously somewhat to the financial aspects. the new government must be much more comprehensive. but since this is not a party platform but only some comments to make more apparent the effect of what might happen in