sethaput suthiwartnarueput : central banking amidst shifting ground welcome remarks by dr sethaput suthiwartnarueput, governor of the bank of thailand, at the bis - bot conference on " central banking amidst shifting ground ", bangkok, 2 december 2022. * * * governors, distinguished guests, ladies and gentlemen. it is a pleasure and great honor for me to be welcoming so many distinguished members of the central bank community to thailand. thank you for making the journey here from near and afar. let me also extend a warm welcome to speakers and panelists joining us on - line today. we truly appreciate your participation in the conference. i would like to also express my sincere appreciation to the bis for helping usorganize and host this event. during a period where the world is grappling with challenges that threaten to pull us apart, the bis has continued to serve as a cornerstone of central bank and regulatory cooperation acting to pull us together. indeed we are all here together in large part due to the convening powers of the bis. this year marks the 80th anniversary of the bank of thailand. this conference is an opportune moment for us to take stock and reflect on how far we have come and chart the way forward. in light of the rapid and seismic changes we have experienced, such reflection is needed more so now than ever. today, central banks are facing a triple challenge from : i ) a rapidly changing economic backdrop that has transformed the nature of the underlying policy challenge ; ii ) shifting conceptual frameworks needed to guide policy ; and iii ) emerging institutional pressure points on policy mandates and central bank independence. in other words, what needs to be done has changed, how to do it has become unclear, and why it should be done is subject to greater scrutiny. for central banks tasked with maintainingeconomic and financial stability, it is as if the ground is literally shifting beneath our feet. hence the theme of the conference today : " central banking amidst shifting ground ". we are exceptionally fortunate to have such a distinguished list of speakers and panelists with us to share their insights and experiences on these issues. to set the stage, let me elaborate on the three key fault lines that central banks will have to navigate at this critical juncture. a rapidly changing economic backdrop the first fault line, reflecting the rapidly changing economic backdrop, is palpable. inflation has returned with a vengeance, catching everyone by surprise. the strong post - pande

on the principles that are now accepted internationally were already brought into practice even before the crisis. these included restrictions on leverage for banking and non banking institutions, stringent liquidity requirements, counter cyclical prudential measures, not recognising in tier i capital many items that are now sought to be deducted internationally, recognising profits from sale of securitised assets to spvs over the life of the securities issued, not reckoning unrealised gains in earnings or in tier i capital. the challenge for us is to facilitate the growth of the real sector through financial products and innovations subject to adequate safeguards and adoption of sound risk management policies. for further strengthening financial regulation and supervision, the following measures are under the consideration of rbi : • based on july 2009 final documents from bcbs on enhancements to basel ii framework, further guidelines relevant to standardized method are being issued. • a draft circular detailing the modalities for adopting the integrated liquidity risk management system as also the guidance note on “ liquidity risk management ” based on basel committee ’ s “ principles for sound liquidity risk management and supervision ” brought out in september 2008 as well as other international best practices will be put up on the reserve bank website by october 31, 2009. • as part of developing financial market infrastructure, recently, capital adequacy norms for ccps have been laid down. ccil ’ s role is being gradually extended to the otc interest rate and forex derivatives segment, initially as a reporting platform and thereafter, covering the settlement aspect. • additional guidance on securitisation focusing on a minimum lock - in - period and minimum retention criteria for securitising the loans originated and purchased by banks is proposed to be issued shortly. • recently, regulatory and supervisory framework for financial conglomerates has been reviewed for enhancing the regime. the enhancements would be put in operation shortly. • rbi would shortly be issuing a draft discussion paper on prudential issues in banks ’ floating and managing private pools of capital in order to sensitize banks about risks inherent in such activities and limit such exposures commensurate with their risk management and available capital. • as indicated in the annual policy statement announced in april 2009, the reserve bank would recommend the implementation of the sound procedures / principles being developed by the fsb for financial institutions regarding the compensation packages. • there has been significant progress in the area of convergence of accounting standards. the indian accounting standards are expected to