against international best practices in the context of the joint imf / world bank financial sector assessment program or fsap. indeed, the outcome of the fsap assessment was very satisfactory, validating our observance of international best practices. moreover, the assessment results also strongly endorse the policy - making frameworks and transparency. as you may be aware, the new financial institutions business act ( fiba ), which governs the framework and conduct of financial institution supervision, is designed to capture the international best practices of financial institution supervision according to basel core principles ( bcp ). with this law, the bot can undertake consolidated supervision of financial conglomerates, together with prompt preventive and corrective actions, macro - prudential measures, and measures to improve consumer protection. overall, our goal is to ensure that our regulatory and supervisory responses keep pace with the financial intermediaries and the products they offer. in this endeavor, the bank of thailand has put emphasis on robust stress testing, enhanced counterparty risk management, and safe and efficient market infrastructures. this leads me to the third source of resiliency. this is the continuous improvement in our financial infrastructure, legal as well as information, and the intermediary functions of financial institutions within the economy. we now have more effective foreclosure law, a credit bureau, and accounting standards such as ias 39 that conform to international best practices. moreover, under the deposit protection agency act which will replace the current blanket deposit guarantee in place since 1997, the establishment of the deposit protection agency should reduce banks ’ moral hazard and enhance market discipline. that is by putting pressure on banks to improve financial strengths if they want to attract and retain depositors. as part of thailand ’ s efforts to advance reforms, the bank of thailand will, under the secondphased financial master plan, focus on improving efficiency and intermediary functions of the financial sector by reducing regulatory costs, enhancing legal and information infrastructure, and increasing the level of competition through further deregulation and liberalisation. deregulation would potentially involve expanding business scope and enhancing the role of existing players, including banks, non - banks and other niche banks. one of the key factors for deciding the optimal number and type of new players would be the value added that new financial institutions, be they universal banks or niche banks, could bring to the financial system, such as technical expertise and product innovations. having said this, i wish to emphasize that we will also closely look

lower cost, thus reducing maturity risks. a liquid government bond market also provides the basis for development of other segments of the financial sector that could draw in significant foreign participation – including forward and future markets, for example, which are needed to support risk management functions of banks and firms. developments in these markets will not only make local bond markets a more desirable investment alternative to both local and foreign investors, but would be vital in the development of a local - currency bond market. an active local bond market also supports financial system stability. holders of bonds – in particular commercial banks – can make use of these bonds in securing emergency funding from the monetary authorities. an active bond market where securities are marked - to - market on a daily basis will facilitate commercial banks ’ access to emergency liquidity assistance through their sale or the use of such instruments as collateral. this mechanism provides a more efficient and transparent process than the use of other types of collaterals such as land, title deeds, or receivables, which have less transparent market value and less liquidity. development of the bond market in thailand the local bond market in thailand, like many other asian markets, has been hindered by a number of institutional problems. the small size of the markets – and the resultant low liquidity – provided little incentive for active participation by both issuers and investors. on the supply side, a small market limits the feasible range of marketable instruments and their effective tradability. on the demand side, a small number of market players and a narrow investor base provided insufficient demand for private players to act as market - makers. a small number of market players and the dominance of a few players hindered competition and market liquidity. thai authorities have made significant strides in developing the government bond market since 1998. a pre - announced and regular issuance calendar for the year is now available to help investors plan their investment horizon. this has enabled the government to borrow at low cost and no longer be penalized for opportunistic behaviour of irregular issuance schedules. the ministry of finance now issues on a regular basis government bonds with a maturity of up to a maximum of 20 years to establish a benchmark rate for medium to long - term debt securities. this has allowed a risk free benchmark to be constructed, and the thai bond dealing center publishes a yield curve on a daily basis. the bot has appointed 10 financial institutions as primary dealers for bilateral repurchase ( repo ) transactions. this set of primary dealers will be