bandid nijathaworn : quantitative models and tools for good risk management opening address by dr bandid nijathaworn, deputy governor of the bank of thailand, at the 2nd seacen - occ advanced seminar on quantitative techniques for macro surveillance and determining resilience of the banking sector, bangkok, 3 september 2007. * * * let me begin by extending a warm welcome to all of you to bangkok, and to the second seacen - occ advanced seminar on quantitative techniques for macro surveillance and determining resilience of the banking sector. the bank of thailand is pleased to be hosting this seminar, jointly with the us office of the comptroller of the currency and the seacen centre. today ’ s seminar reflects another important effort in forging a closer cooperation and network between us regulators and the central banks and regulators of the southeast asian region. such a close tie is most valuable for it is a platform that helps facilitate supervisory coordination that is necessary for an efficient home - host relationship, as well as for exchanging views on important market developments and supervisory issues such as on financial innovation, on the implementation of basel ii, and on accounting standards. going forward, such a close tie will be even more valuable, because an important component of a good macro - surveillance process is an open and timely dialogue, and exchange of views among regulators from different jurisdictions. with a deepening process of financial globalisation that we are now seeing, supervisors and central banks are faced with increased challenges to analyse and manage risks, especially in the context of more complex interlinks between financial institutions and financial markets, as well as between domestic and the global economies. in such an environment, the risk management ability of financial firms and supervisors is important and rests crucially on the ability to assess quantitatively and in a forward - looking manner, the possible impact of each risk scenario on the economy and its financial sector. in this light, a sound and practical approach to integrate the quantitative assessment into financial stability and into risk - based supervision is most crucial, as it will allow the potential key risk affecting the financial sector to be identified, to be assessed, and to be ranked in order of importance. through this, the approach will help focus policy dialogue and facilitate communication between all the key stakeholders, namely – the supervised financial institutions, the home and host supervisors, other related supervisory agencies especially in the case of complex financial conglomerates, and between the monetary authority and the finance ministry. in moving forward, it

the consequences of the drop in oil prices appear to be well understood, and that the possibility of a rate cut had begun to enter markets in the last couple of weeks. moreover, given the magnitude of the shock, we concluded that the benefits of acting now rather than waiting would outweigh the costs of any short - term market volatility that might arise. with that, carolyn and i would be happy to take your questions bis central bankers ’ speeches