In particular, the fact that unemployment rates remain high despite the pick-up in economic activities has led many people to worry that this might be a “jobless recovery”. This high unemployment, if prolonged, could have a deep and lasting impact on both consumption and the potential growth of the US economy. Moreover, consumption in the US will be adversely affected by the decline in household wealth as well as the increase in personal saving rate. Other issues which may exert downward force on the world recovery include the high level of public debt which may put upward pressure on long-term interest rates and the US and other advanced countries’ financial sectors which are still weak and may not be able to support the recovery of the economy. On the domestic front, the downside risk comes from the ability of the government to swiftly execute the SP2 investment projects. In other words, the disbursement may not proceed as expected due to the lack of capacity to effectively implement many projects simultaneously. More importantly, political unrests which affect the stability of the coalition government may distract, disrupt, or in the worst case, discontinue the disbursement process. Taking both upside and downside risks into consideration, the Bank of Thailand’s Monetary Policy Committee assessed that the Thai economy is expected to recover gradually, supported by better global economic outlook and accommodative monetary and fiscal policies. Meanwhile, the inflationary pressure continues to be subdued for the time being.
Even though the liberalization policies were adopted independent of the EU perspective, they helped to facilitate Turkey’s attempt to apply for full membership, by providing a solid basis for lasting progress. On the other hand, member countries of the EU have tried to make some adaptations in their banking regulations to integrate financial systems. Competition among them has increased. A universal banking system is accepted. Banks either have increased their assets or have merged with other banks in order to be strong in a market where competition is intensified. New financial products are created every day. Technology is used intensively in order to reduce costs and serve customers better. In parallel to these developments many reforms have been made in order to develop the Turkish banking system. Some amendments were made to the Banking Law to harmonize it with European standards, and now we are in the process of preparing a new Banking Law. These changes will require some banks to strengthen their financial situation and bring their credit risk and equity participation ratios closer to the EU norms. Within the process of becoming more deeply integrated with the European financial markets, the Turkish banking system will now face new competition. The CU agreement has naturally affected Turkish banks and changed the dimensions of competition. But Turkish banks seem ready in many ways for this new and larger competitive environment. Today banks in Turkey are made more dynamic by a high-technology electronic infrastructure, high-quality services and well-trained manpower.