year, having peaked at over 110 dollars just one year ago. against this backdrop, market participants have been increasingly concerned about investment and business implications. so what brought about heightened volatility in the global markets? i will attempt to answer by highlighting two key sources of volatility. in the aftermath of the global financial crisis, unconventional monetary policies – most notably successive rounds of quantitative easing – were implemented by major advanced economies. this abundant global liquidity contributed largely to strong asset price gains and higher risk appetites. as major central banks pursued their policy of flooding the market with liquidity, risks had been compressed, intentionally or otherwise. bis central bankers ’ speeches recently though, despite ample global liquidity, investors have grown worried about the diverging paths of monetary policy among major central banks. that is, the federal reserve or the fed is poised to begin its tightening phase while the european central bank, the bank of japan, and the people ’ s bank of china are likely to continue their ongoing monetary easing for a considerable period of time. the implications of diverging monetary policy stance for asset markets have weighed on the minds of investors around the world. as i shall elaborate, it is probably not the excess liquidity per se that generates turbulence and volatility, but prospects of the exit – or reversal – that does so. in the near future, global markets are bracing for the impacts from the fed “ lift - off ”, leading to growing nervousness in the markets. although the prospect of an interest rate increase by the fed has been widely anticipated ever since the taper tantrum in 2013, the uncertainty over its timing and possible impacts has in part contributed to episodes of market turbulence this year. after the eventual lift - off – whenever that may be – the markets will turn their attention to the pace of monetary tightening – or rate increases. the shift in market expectation over the pace will prompt volatility going forward. hopefully i have not spoilt your morning by delving too deeply into volatility. but, let me stress this, monetary policy divergence will continue to be an underlying source of volatility in the global and regional financial markets. however, issues in financial markets are, by no means, disconnected from the real economy. indeed, volatility arises from slow recovery, and timid growth outlook for the global economy, the so - called “ new normal ”. looking ahead, the global economy is expected to grow only at a subdued pace as some major advanced

rate. the thai banking system is also resilient, with a high level of capital buffer and stable loan growth, despite some deterioration in loan quality. banks have closely monitored their customers, and have maintained a high level of loan loss provision as a buffer for bad loans. they are also well capitalized, with the capital adequacy ratio at 17. 3 per cent and tier1 ratio at 14. 4 per cent, among the highest in asia. this suggests that our banking system has sufficient capital to shoulder unexpected loss, and accommodate credit expansion. in addition, their profitability will help enhance their capital base over time. last but not least, inflationary pressure is stable due to a substantial fall in oil price from last year. headline inflation, though currently in negative territory, is expected to gradually rise, and turn positive in 2016. deflationary risks remain contained as demand continues to expand, and prices of most non - energy items remain stable or trend upwards. such inflation trajectory is consistent with medium - term expectations of the public and the bank of thailand ’ s medium - term inflation target. overall, the economy and our financial system show a good sign of stability and resiliency. bis central bankers ’ speeches let me now turn to implications for the real economy and begin by giving you some positive news, that is, the economy is likely to register stronger growth momentum next year. tourism continues to show good prospects where the number of tourist arrivals is likely to exceed 30 million in 2016. fiscal stimulus will continue to be a key growth driver. public expenditure is expected to increase by more than 200 billion baht from this year, providing support to the economic recovery, especially the construction sector. in the private sector, there are signs of investment expansion in construction, telecommunications, and alternative energy, among others. although we may see export contraction in 2015, there are resilient spots in certain sectors. exports to clmv economies have experienced strong growth, and continue to show great potentials from which thailand could capitalize. in fact, the share of exports to clmv in our total exports is now on par with the share of our exports to the major trading partners such as the us, europe, and japan. thailand ’ s exports to the us are also poised to become firmer as the us economy continues to see improvement in its recovery. our exports of vehicle parts, electronic - appliance parts and electronics to the us have expanded in the past few months, and