prasarn trairatvorakul : recent challenges and the way forward speech by dr prasarn trairatvorakul, governor of the bank of thailand, at the japanese chamber of commerce dinner talk, bangkok, 22 march 2012. * * * good evening, distinguished guests, ladies and gentlemen, i would like to thank the japanese chamber of commerce for inviting me to speak again at this special annual event. each of these years has brought us yet more economic surprises and challenges. in 2010, the world economy grew surprisingly fast and the thai economy promptly rode on the wave of global recovery. then last year, the european sovereign debt problem erupted and depressed the global economic environment, while at home both of our economies were badly hit by devastating natural disasters that took a heavy human and economic toll. in thailand, the damage from the floods was indeed severe. output loss was estimated to be around 3. 2 percent of gdp and economic activity contracted sharply by 9 percent year - on - year in the last quarter of 2011. manufacturing and agricultural outputs as well as exports were severely dented. the automobile industry, which was just recovering from the supply chain disruptions following the earthquake and tsunami in japan, was hit especially hard. but as you are well aware, shocks from natural disasters are temporary in nature. they tend to be followed by rapid resumption of economic activity as things get back on track, as was the case with japan in the aftermath of the earthquake. from a medium term perspective, therefore, such events cause less economic dislocation than disruptions that reflect inherent structural weaknesses in the economy. even temporary shocks, however, do often expose deeper shortcomings if they are sizeable enough. in thailand ’ s case, water management and crisis response systems have been shown to be inadequate. the government has rightly given high priority in addressing these gaps over the medium term. but in the immediate future, there is no question that thailand will rebound quickly and strongly from the recent setback caused by the floods. i also believe that the country ’ s underlying economic strengths will continue to support dynamic growth going forward and allow our economy to weather the global economic headwinds. in my remarks this evening, i would like to first highlight thailand ’ s fundamental strengths that underpin this positive outlook. then i will move on to discuss the role of the bank of thailand ( bot ) in further strengthening economic resiliency and enhancing competitiveness. before i delve into the key themes

the credit approval process should, for example, prevent over - indebtedness. the features and conditionalities of financial products should be clearly communicated. transparency in information and pricing should be the key principle in marketing and client dealings. client - focused banking further means treating consumers, regardless of their economic standing, with fairness, dignity and respect in all phases of transactions. this requires ensuring the integrity and confidentiality of client information. it also necessitates measures that prevent fraud or abuse. for example, staff training in good customer service is important. incentivizing ethical behavior can positively reinforce staff honesty and reliability. treating clients with respect at all times, of course entails quite a lot of patience and tolerance, but this will surely endear you more to your clients. another important element of client - focused banking is a straightforward mechanism for complaints resolution. we at the bangko sentral, encourage banks to institutionalize a system of redress that immediately addresses customer concerns. it is essential that your clients know where or who to complain to within your institution. bis central bankers ’ speeches complaints should be viewed in a positive light. the complaints or negative comments that you receive provide insight to what might be amiss in your products or policies, or to what you might be doing wrong in your operations. providing a formal avenue for complaints, even just a humble “ suggestion box ” in a corner of your branches, is one way for the bank to listen and learn directly from clients. information from complaints often carry implications or suggestions for the improvement of product design, delivery, branding, marketing, communications, even for governance and decision - making. as bill gates once said, “ your most unhappy customers are your greatest source of learning. ” when you make your unhappy customers happy, you ultimately benefit from preserving a reputation that your bank cares. the bangko sentral has established a dedicated unit that attends to complaints against our supervised institutions, the financial consumer affairs group ( fcag ). among the complaints that fcag has received is on credit cards, because clients misunderstood or were unaware of the “ fine prints ” about the fees and charges on their credit card contracts. thus bsp circular 702 dated 15 december 2010 was issued to address, among others, the disclosure of all fees linked to credit card transactions. this is just a simple example of how customer complaints can inform policymaking. your institutions too, can leverage on complaints information in the same way. while you implement institutional procedures to ensure consumer protection and