process. we are conscious that a whole process of prudential re - adaptation is called for in this respect by both banks and regulators. i may add that we are well on course, fully aware that basel ii is more than a simple framework for fixing an amount of capital consistent with the specific risks taken by a bank. in fact, basel ii is expected to create a whole range of positive spinoffs. among others, it will help put in place a wider framework for supervision and regulation to be conducted on a consolidated basis. supervision will become increasingly more risk focused and that, not with respect to basel ii implementation alone, but along with a re - focussing of other prudential rules as set out in the basel core principles. moreover, a system is expected to evolve out of basel ii that will enable intervention on the markets much before a crisis sets in because the whole framework is intended to avoid having to take action before any wide scale financial distress is at the doorstep. care will also be taken to ensure that costs of regulation and supervision do not weigh down on the benefits of efficient private market operation in the implementation of the associated regulatory rules. all these will add value and, hopefully, lighten the overall burden of financial regulation while promoting overall financial stability at the same time. we have therefore to look into a framework of benefits and market efficiencies to be gained beyond ordinary basel ii considerations. those benefits will emerge after basel ii becomes part of the reality and gives rise to a new thinking about what may be called a more even level playing field than what prevails cur rently at the national and international levels. it is for these reasons and to be really effective that the bank of mauritius has adopted, together with banks, a consultative and participative approach for basel ii implementation. the target date for implementation has tentatively been set for beginning 2008. much work has been done already at the level of the basel ii implementation committee. proposal drafts on work done have been circulated for views and comments from the industry as a prelude to progressive basel ii implementation in the form of guidelines issued to the industry. it is not intended to impose any specific basel ii approach but banks are being encouraged from the start to go for an approach – such as the internal ratings based approach – by which they will effectively add value now and in the longer term to the inherent capabilities of their institutions. all this is being done without losing sight of the investments banks are making or have already made to progress towards

global risks and thailand ’ s economic outlook veerathai santiprabhob, governor of the bank of thailand fitch ratings thailand ’ s annual conference 2018 october 2, 2018 ladies and gentlemen, i am delighted to be here with you this morning, and i would like to thank fitch ratings ( thailand ) for inviting me to speak at this event. when i was asked to deliver the opening speech for this event, i thought, what would be the most important message i can share with you as a central banker? i thought that, in many ways, the job of the central bank and that of a credit rating agency are similar. we both need to look far ahead into the future ; we both need to be conservative ; and we both need to assess risks to the economy. with this in mind, i would like to share with you my thoughts on the risks that the thai economy is facing, where thailand stands in terms of dealing with those risks, and how we can ensure a solid footing going forward. ladies and gentlemen, as evidenced by vulnerable fund flows and sharp currency movements, there is no denying that the global financial markets have become increasingly turbulent. the complex financial network that has helped facilitate efficient flows of fund across the world could, in times of turbulence, become a contagion linkage that disrupts economic activities. as a part of this interconnected financial network, thailand is no exception. today i would like to highlight four key risks that could create more turbulence in the short - to medium - run : the tightening global financial conditions, growing trade disputes, geopolitical risks, and domestic financial stability risks resulting from the prolonged period of very low interest rates. soon after the global financial crisis, thailand ’ s economy — like that of other emes — felt the unintended consequences of advanced economies ’ unconventional monetary policy stimulus. large capital inflows in search for higher yields caused significant upward pressure in asset prices as well as on emes ’ currencies and corporate debt. it is inevitable that the reversal of that extreme measures — i. e., monetary policy normalization — would have the same sizable effect on emes as well, and this constitutes our first source of risk. in addition to the fed, more central banks are expected to normalize their monetary policies in the coming years. as excessive liquidity unwinds, higher yields will drive up costs of capital faced by firms and governments, while emes with vulnerable external conditions and weak currencies will