closely monitor the external environment to capture these risks. it is also important to improve thailand ’ s capacity to cope with international capital flows by developing a systematic capital flows master plan, and promoting the use of financial hedging instruments and the foreign exchange risk management capability of the private sector. the bank of thailand also stands ready to implement emergency measures of varying degrees to deal with volatile capital movements as appropriate. in addition, to prevent these inflows from causing economic and financial instability, the bank of thailand has prepared a toolkit of macro prudential measures to ensure the soundness of the macro economy and the financial sector. measures to prevent overheating in particular segments of the property market are one example. ladies and gentlemen, it would be uncommon for a central banker not to mention inflation and monetary policy in any speech. i would therefore like to emphasize that the bank of thailand ’ s monetary policy aims to achieve domestic price stability and tighten to more normal levels consistent with thailand ’ s macroeconomic fundamentals. price stability helps foster a stable and predictable macroeconomic environment conducive to investment and growth. this is because it helps investors, businesses, and household to effectively make plans and manage their risks, as well as lower businesses ’ cost of funds. to end my remarks today, i would like to stress that while there remain risks and uncertainties surrounding the overall outlook for global growth, prospects for asia remain relatively bright. however, countries in asia, and thailand especially, need to put real efforts to foster capacity, innovation, and productivity. we must also prevent excessive risk taking and lax policy - making from becoming the norm. this requires preempting excessive risktaking and conducting policy with prudence. i can assure you that the bank of thailand is committed to ensuring a stable macroeconomic environment which would help investors, businesses, and households in planning their economic activities and to operate effectively. however, policies can mitigate only parts of the spectrum of risks. the business sector must also be mindful and well - prepared to deal with new risks and challenges, going forward. thank you. bis central bankers ’ speeches

the theoretical example you cite underlines the problem i just mentioned of the borderline between monetary and fiscal policy. we are already supporting investment in the euro area through our monetary policy. we have brought down the entire yield curve and we are buying securities of public entities such as the eib as part of our asset purchase programme. but it is absolutely not our role to decide which investment should go ahead, which bridge should be repaired or which school built, nor whether the investment should be private or public. ben bernanke, in his memoirs, suggests that if the united states and europe took different paths out of the crisis, that is partly because europe ’ s monetary policy in the first years was too tight, and its fiscal policy too strict at the wrong moment … i ’ m not for rewriting history, but the ecb and governments reacted with the tools they had at the time. they went through three crises – the subprime crisis in 2007, the 2009 global economic slowdown and the euro crisis from 2010 on – without a common fiscal backstop ( that only came in 2010 with the european financial stability facility ) and without the foundations of a banking union. if we were to draw lessons from the experience, i would rather insist on the fact that the euro area was too late and too timid in cleaning up and shoring up its banking system, i. e. stress testing the banks, raising capital and shedding bad loans. that partly explains why our recovery is lagging behind that of the united states. in banking matters, forbearance doesn ’ t serve a purpose. you can ’ t buy time. we ’ re catching up now, but we still have some way to go, and the banking union isn ’ t complete. some countries, such as germany, insist that there should be a limit on euro area banks ’ sovereign exposure. do you agree? there are three dimensions in my view. there is the question of sovereign risk for banks. but we must also consider the consequences for government financing, and the functioning of financial markets, which need risk - free assets as liquidity instruments. if you focus on one aspect of the problem and ignore the others, you run the risk of shifting risk around instead of reducing it. the ecb ’ s policy is increasingly unpopular in germany. do you foresee a moment when it might become an obstacle to your own action? europe nowadays is a source of irritation for many. not only its monetary policy, and not