popular issues amount to one - third of its outstanding amount, which is a very encouraging sign. bid - spreads are narrowing and now can boast a level not significantly far from the more developed bond markets. we have completed a yield curve available on the internet that spans from less than one - year, out into the 15 - year tenure. this, complemented with the low interest environment, has boosted the issuance of corporate bonds. last year alone, we have seen over 200 billion baht of private bonds issued. of course, some of these were used to recapitalize the banking system, but no small amounts were also used for refinancing corporate debts as well as for business expansion. we are fortunate that the legal framework for the supervision of the capital market, namely private and public offering and investor protection, have already been instituted. in fact the private debt market started to flourish since 1992 after we set up the securities and exchange commission. with this framework, the private debt market was able to resume activity again after the crisis but this time with the government yield curve as pricing benchmark. with regard to the operation of the secondary market of government bonds, the bank of thailand is currently working on the promotion of a full - fledged primary dealership system to facilitate the conduct of open market operations. we aim for the primary dealers to eventually provide marketmaking functions for both government and private securities. the operation of primary dealers or counterparties of the central bank will be complemented, should market participants deem it useful, by the presence of inter - dealer brokers, who can assist in ensuring continuous two - way quotation, as well as helping to preserve the anonymity of transactions or positions held by a market participant. in august 1999, we appointed 9 counterparties, which comprised eight banks and one securities firm. starting 19 january 2000, the bank of thailand also began trading outright with the 9 counterparties. this operation serves as a monetary policy instrument as well as the mechanism to promote the development of the secondary bond trading. at this early stage, the outright operations will be conducted primarily in the benchmark issues or those with potential to become benchmark issues. these selected counterparties are expected, ultimately, to become primary dealers and we are currently working on putting the right incentives to ensure that appropriate rights and obligations be accorded to these primary dealers. the third area i would briefly touch on is infrastructure issues. here, work is ongoing to promote a fully automated system of delivery

under such market conditions – the temporary inability of banks to provide refinancing leads to insolvency and thus to a situation of widespread default. in neither of the two cases – normal times or crisis periods – can the central bank be considered responsible for the survival of bank counterparties that are close to bankruptcy. ] in a recent paper entitled “ a monetary policy strategy in good and bad times : lessons from the recent past ” ( ecb working paper, no 1336, may 2011 ), s. fahr, r. motto, m. rostagno, f. smets and o. tristani simulated a “ counterfactual ” monetary policy strategy which did not include credit and money among its variables of observation and reaction. the authors found that as a consequence of the shock caused by the collapse of lehman brothers, the euro area would have entered into a protracted period of deflation and the level of gdp at the end of 2010 would have been 2 percentage points below that which was observed. bis central bankers ’ speeches the two long - term refinancing operations achieved the purpose for which they were intended. in an environment of a near - shutdown of private credit markets, banks were not able to refinance their assets and were unable to maintain their level of exposure to households and businesses. the extensive long - term refinancing allowed for the partial and temporary substitution of private credit with central bank money and thus avoided a disorderly process of credit to the economy running dry. nevertheless, these operations were not without their criticism. these can be summarised in three points : 1. the growth in liquidity following the two operations will ultimately lead to inflation ; 2. the eurosystem ’ s balance sheet is exposed to unprecedented and uncontrollable risks ; 3. such operations have reinforced the perverse link between banks and sovereign debtors and may be considered a violation of the prohibition of financing public debt with central bank money, laid down in article 123 of the treaty. and, the opposite – but conceptually equivalent – criticism that these operations did not provide the economy with finance. as regards the first point, it is again pertinent to refer to strategy : in the medium to long term, the inflation dynamic reflects developments in broader monetary aggregates. conditions that encourage the creation of inflation or speculative bubbles are generated by strong and sustained growth in money and credit, not necessarily as a result of an increase in liquidity granted by the