work on securitization and credit enhancement. given that at present, a number of bonds issued by asian entities are below investment grade, the use of securitization and credit guarantees to enhance the quality of these issues can act as a near - term solution to giving these issues a credit quality acceptable to investment managers, and give them the needed initial exposure to private investors. the introduction of these new instruments – which would attain a credit quality acceptable to investment managers by achieving a high rating from international rating agencies – would also benefit the international financial community by providing investors with a greater diversity of products and instruments for investment. more importantly, it would enable smaller corporate entities – who would otherwise be limited to financing themselves through short - term commercial bank lending – to access bond markets and find a source of funding more suitable to their needs. cross guarantees a means of helping economies with less developed local bond markets to issue debt in the regional market may be through the use of cross guarantees. as part of regional financial cooperation and a step towards greater regional financial integration, cross guarantees can reduce the cost of funding for smaller economies with lower credit rating through guarantees provided by more advanced nations. the use of cross guarantees will be similar in principle to the use of credit enhancements, resulting in improved credit risk of bond issuances as well as lower funding costs for bonds. but while credit enhancement can be offered by a third party, cross guarantees are made by countries within the region in an effort to collectively develop the region. a number of concerns may arise with the use of cross guarantees, namely the problems of moral hazard arising from any type of guarantee, the resultant price distortion, and the perceived free rider problem of the smaller economies. to lessen the risks that would arise from moral hazard, such a guarantee may only be partial. the problem of price distortion will be difficult to mitigate, given that bonds issued with cross guarantees by definition will not have their total risk reflected in price. however, this in turn will help benefit issuers in terms of lower cost of funding. with regards to the free rider problem, it is clear that a system of cross guarantees will benefit the lesser developed economies most, since they will not be in a position to guarantee any other issuers. however – with the spirit of regional financial cooperation for development of asia as a whole in mine – countries with more advanced financial systems may decide to offer these guarantees for a limited period of time. proposals for development and integration : enhancing market infrastructure currency arrangements

. monetary policy ladies and gentlemen, let me turn to my last subject, that of monetary policy. 8. the mpc ’ s ultimate mandate is to safeguard the macroeconomic and financial stability of the country. in the last few years, the bank of thailand has maintained an accommodative monetary policy stance. mindful of imminent downside risks to growth, the policy rate was cut three times in the mpc meetings of may and november 2013, and again in march 2014. in these three meetings, the mpc were of the view that the reductions of policy interest rate were necessary to ensure sufficient support to the domestic economy. the current real policy interest rate, which is now in a negative territory, aims to help alleviate the financial burden on households and corporations, allowing them to withstand short - term shocks. 9. however, as the current policy interest rate is already low, further easing would not be without concerns. in the last meeting in april 2014, the mpc decided to maintain the policy at 2. 00 percent. the rationales behind this decision were that the current monetary policy stance was accommodative enough to support the economy as the prolonged political uncertainties were the main cause for risk to growth, not the financial conditions. meanwhile, room for further policy accommodation was diminishing, and any possible side effects of keeping the interest rate low for a protracted period, needed to be taken into account. 10. i would like to end my remarks by thanking you all again for your contributions to the thai economy and let me assure you that the bank of thailand will continue our works to ensure a stable and resilient financial and economic environment, conducive to economic growth of the country. thank you very much. bis central bankers ’ speeches