, investors in the stock market closely monitor businesses, and will withdraw funds from those that have low prospects of future growth, moving them to those with better prospects. the growth prospects will be realized, and in aggregate will improve the whole economy ’ s growth potential. a well - developed financial market also lowers the cost of raising funds, as the increased competition broadens the variety of financial products offered. an sme for example, whose credit - worthiness is difficult to assess compared to a corporation, might be limited to self - funding in a less - developed market. but in a well - developed financial market, corporations can turn to other channels, leaving commercial banks more incentive to serve smes. in 2004, financial sector master plan phase 1 was adopted and, to continue improving the financial sector, financial sector master plan phase 2, the current phase, was launched in 2010. this current plan helps promote competition in the financial market. continuity of these plans and implementation over several years has improved thailand ’ s financial infrastructure, as indicated by lower cost - to - income of commercial banks. progress is especially visible in the sme segment. promoting competition among players in the banking sector has steered banks to seek more opportunity in this segment. at the same time, the bank of thailand has helped lay down infrastructure that reduces the asymmetric information problem in this segment by means such as setting up the sme database. with the convincing results of the current plan which will end this year, the bank of thailand has recently set up a steering committee to look after the next phase, financial sector master plan phase 3. in addition to financial sector master plan, the bank of thailand also encourages thai companies and depositors to diversify their investments and promote financial market development through the implementation of capital account liberalization master plan. as a result, there is increase in the number of thai companies doing outward foreign direct investment which allows capital as well as resources to be allocated more efficiently. bis central bankers ’ speeches at this point, it is important to note that resources and infrastructure built by the government and central bank are not sufficient in themselves to lift the economy ’ s growth potential. more importantly, financial institutions and businesses must utilize them and act as the main player that will drive the economy to its highest potential. therefore, cooperation of financial and business sectors is vital for lifting growth potential. the private sector needs to add more value to products and services by having long run commitment and investing in both physical and human capital, for example,

. bank of thailand has experience in employing several macroprudential tools since 2002 to prevent financial instability that may stem from, for example, excessive credit card loans to sub - par debtors, excessive foreign exchange speculation, and a formation of real estate bubble. i would like to refer to another of our policies to maintain financial stability. to ensure capital flows and exchange rate stabilities, the bank of thailand uses a managed float on exchange rates. the policy allows the thai baht to adjust via market mechanism, helping to stabilize against volatile capital flows. it also allows flexibility for the bank of thailand to influence the exchange rate in extreme events in order to avoid excessive volatility. all the mentioned policies have helped to keep the current economy in good balance. today, capital flows, private sector balance sheets, as well as real estate values remain healthy, which should allow private spending to return with confidence and enable fast recovery. however, there are risks we must closely monitor over next year. as the u. s. economy continues to recover strongly, earlier timing of the u. s. interest rate normalization is anticipated, which could result in capital flow volatility. at the same time, household debt, at 83 % of income, is also a factor to be monitored with caution. we have now covered growth, price, and financial stability. the central bank aims to maintain all three facets of stability for continuity in order to support growth potential. with a promising recovery prospect, minding the future risks to financial stability and being equipped with stability tools tested and refined over time, the monetary policy committee will carefully weigh the tradeoff between short - term gains and longer - term risks and ensure that the economy will be provided with enough financial ease to recover sustainably to its potential. ladies and gentlemen, apart from the deviation from potential i mentioned earlier, the current economy shows symptoms that potential growth, which depends on labor, productivity and infrastructure development, may have reached its limit. at this stage of our discussion, let me refer to some prominent symptoms. thai labor supply has started to gradually decrease due to the trend of aging society. research has shown that increasing labor supply by increasing retirement age and reliance on foreign labor will not be sufficient. since we must accept the aging workforce trend, we must rely on increasing productivity and efficiency through structural changes to lift growth potential, a task which requires supply - side policies. thailand ’ s productivity growth has declined since the asian financial crisis due to the misall