- that the costs of new methods of control must be weighed against the risks to be managed. regardless of the fact that there are now outstanding issues to be resolved to improve risk management, my overall conclusion is positive. the development underway with regard to identifying, measuring and managing risks provides possibilities to improve stability in the banks and other parts of the financial sector. we still have some way to go, but the work is proceeding and is presently in an intensive phase in both the financial institutions and the authorities concerned. the riksbank intends to continue to play an active role in this work. thank you.

liberalization strategy is to ensure strengthening of the domestic system, and allow gradual opening of the banking sector. this will mean new entries into the system, as well as more intensified competition between existing players. the phasing of this process will be consistent with continued economic and financial stability. the banking system must be prepared for greater competition. improved risk management framework will be the critical success factor for banks'ability to meet future challenges. these include the adoption of ias 39, currently underway, and the new basel capital accord at the end of next year. we realize that these reforms pose a major challenge to the banking system in thailand as in the global market. however, the process of policy consultation and dialogue with the banking sector has assured us that banks are able to cope, although some more so than others. nevertheless, ias 39 will improve the transparency and provision buffer against impaired assets, while basel ii has already raised the standard of risk management that will be absolutely crucial going forward. in summary, we are moving in the right direction and are in a good position to build on this reform and to consolidate our progress. how well - founded is our confidence? as you know, we are currently undergoing the financial sector assessment programme or fsap with the imf and the world bank, which assesses the supervisory process and financial sector soundness. preliminary findings on our compliance to the bis core principles of banking supervision are favorable, with the results mostly fully compliant and largely compliant. all in all, thailand's supervisory system compares well to international best practices. the only exception, as we all know, has to do with the inadequacy of the current legal infrastructure that provides for the central bank's autonomy and explicit supervisory power in key areas. i must thank the tremendous effort and cooperation made by the banking sector throughout the whole fsap process thus far. the next phase of the process will involve the stress test analysis of the banking system, which again, will require your cooperation. the value of this exercise is not only to confirm our strength, but also to help guide us to areas of improvement that can safeguard us against future challenges. you can expect more improvements in our supervisory system in the months and years ahead, especially after the new financial institutions businesses act is enacted. ladies and gentlemen, the economy and the banking system have come a long way to reach this point, where we are able to remain resilient against many difficult challenges. such ability, to a large extent,