the country ’ s overall payment system is fully integrated and contributes positively to the overall efficiency of trade and commerce within and outside the country. this in turn will enhance the country ’ s capacity to face competition and challenges in the international financial and investment environment, at the regional and global levels. nevertheless, while information technology proceeds at the speed of light, the corresponding legislative reforms take time. the bank of thailand, along with other government agencies, is working hard to push forward for the enactment of crucial legislations such as the electronic transaction act, electronic digital law, electronic fund transfer, to name but a few. technological revolution in the banking and financial world, such as the advent of e - money, have had an impact on fundamental central banking concerns, particularly on the definition of “ money ”, the transmission mechanism of monetary policy and the traditional intermediation function of banks and deposit taking institutions. these, in turn, will likely make the conduct of monetary policy more difficult and challenging. monetary authorities will need to stay on top of these developments. finally, let me conclude by hoping that i have left you with some food for thought for your further deliberation and discussion. may i also take this opportunity to thank the organizers of the conference on finance and capital markets for inviting me here today.

. despite the speed with which bank rate was cut to 0. 5 % in late 2008 and early 2009, and the rapid move to quantitative easing, the economy is still looking fragile. during the pre - crisis period, mpc members recognised in a number of speeches the possibility that the upward trends in property prices and in the growth of credit were increasing the risk of a period of economic instability. for example, as long ago as 2003, charlie bean suggested : “ action taken today to reduce the build - up of imbalances might pay off in the longer term by reducing the future uncertainty that the policymaker will face as imbalances unwind. ” 2 at around the same time i commented, with reference to the rising household debt / income ratio, that this “... may have increased the risk from policy error, or from an adverse shock to the household sector. ” 3 and andrew large argued : “ the key issue world trade monitor, source : netherlands bureau for economic policy analysis. bean ( 2003 ). barker ( 2003 ). for monetary policy is that the more capital gearing or leverage increases, the greater the vulnerability to shocks and the consequent adjustment to consumption behaviour. ” 4 one conclusion might be that the depth of the present crisis might have been mitigated if the mpc had taken the view that, in those circumstances, it was preferable to miss the inflation target on the downside in the short - term. some former members of the mpc have certainly argued more recently 5 that it would have been preferable to have “ leant against the wind ” of credit growth by having had higher interest rates during the mid - 2000s. but on the whole, i continue to think that there are a number of problems with this proposal. firstly, it is unclear how much higher uk interest rates would have needed to be to have kept the expansion of credit and debt to an acceptable level ( not least as there is considerable uncertainty about what that level might be ). it seems likely that interest rates might have needed to be substantially higher, in real terms, to have had any noticeable effect. in this case, cpi inflation could well have seen an extended period below target. ( the cpi was in any case below target for the first 18 months after the change to cpi from rpix as the key inflation measure. ) there would in these circumstances have been a risk of a damaging loss of credibility in the inflation targeting regime – although it would clearly have had