expectation through our inflation targeting framework, adopted since 2000. many times during this period, well - anchored inflation expectation has allowed flexibility for the bank of thailand, when needed, to actively support growth and ensure financial stability. as you well know from the subprime crisis, an economy with growth stability and price stability can still fall into contraction due to financial causes. the bank of thailand has learned from our own experience with a financial crisis as well as others ’ and has been vigilantly monitoring indicators of risk to financial stability in the economy, and has policies developed especially to ensure financial stability. conducting policy through the use of interest rate alone may not be sufficient to take care of financial imbalance. in addition to monetary policy, which sometimes is too blunt to optimally take care of financial stability, we have adopted macroprudential tools since 2002 and employed them to help us cover and specifically target areas of the financial system. for example, we monitor excessive credit card loans to sub - par debtors, excessive foreign exchange speculation, and formation of a real estate bubble. apart from abovementioned policies, the managed float exchange rate regime helps maintain stability in capital flows. under this regime, thai baht is allowed to move in line with the market forces but gives the central bank ability to influence the exchange rate in the time of excessive volatility. all the mentioned policies have helped to keep the current economy in good balance. today, capital flows, private sector balance sheets, as well as real estate values remain healthy, which should enable fast recovery. although the economy is anticipated to recover after private confidence regains, some notable risks must be addressed and closely monitored over next year. one that is worth mentioning is the expected u. s. interest rate normalization after recovery of the u. s. economy, which could lead to capital flow volatility in thailand. even with headwind from the fed ’ s action of hiking policy interest rate, we anticipate only limited impact on overall thai economy as the market has already gradually priced in the fed ’ s stance since last year. additionally, our reserves remain high, allowing the economy to be cushioned from the possible outflows of capital. moreover our managed float exchange rate regime automatically stabilizes against possible volatility. at the same time, household debt, currently at 83 % of gdp, requires a long - term solution. while its effect so far remains contained, its risk cannot be ignored. over the recent years, the

criteria for assessing the suitability of candidates are implemented and interpreted differently across the various euro area countries. another source of regulatory fragmentation is the supervisory powers under national law that are not explicitly mentioned in crd iv. this concerns, for instance, major transactions which can be very relevant for the risk profile of a bank : for example, a bank acquiring a non - bank, or mergers and de - mergers involving a bank or transfers of assets. in some member states, these transactions need to be approved by the competent authority ( and rightly so ), in others they do not. and such regulatory fragmentation is not just a legacy we inherited from former times. even today, there are cases where fragmentation is actually being increased. in some countries, national legislators are converting non - binding supervisory practices into binding legal acts, thereby making it harder for the ecb to harmonise these practices. a recent example is the german law on bank resolution. this law delegates to the ministry of finance the power to issue regulations in areas such as internal governance and risk management. consequences of an imbalance between supervisory and regulatory harmonisation the regulatory landscape in europe is still fragmented. and from my point of view, many variations in national legislation can no longer be justified now that we have european banking supervision. imagine being a referee in a football match ; your main task is to administer the rules of the game. but what if the individual players adhere to different rules? in such a game, you as the referee would be forced to apply different rules depending on the player in question. you would have to judge similar situations in a dissimilar way – a foul by one player might warrant a penalty kick ; a foul by another player might not. in a sense, the ssm is that referee. article 1 of the ssm regulation requires the ecb to carry out prudential supervision “ with full regard and duty of care for the unity and integrity of the internal market ”. the article also refers to the “ equal treatment of credit institutions with a view to preventing regulatory arbitrage ”. a fragmented regulatory framework makes it difficult for the ecb to meet these requirements. in extreme cases, we are faced with 19 different legislations. and in many cases, we indeed have to judge similar situations in a dissimilar way. taking decisions under such bis central bankers ’ speeches circumstances is complicated and time - consuming. it requires substantial resources and is at odds with the idea of having a single european supervisor and a