Inflation has also been stable at a low level of 1.4% in August, whilst foreign reserves have also regained the healthy level at 32.6 billion $ at end of 2000 and have been maintained at that level up to now. Total external debt has declined from 109 billion $ at end of 1997 to 73 billion $ now. Political environment no longer appears as an obstacle towards the recovery path. As far as the financial sector is concerned, sovereign and commercial banks credit ratings have been stable. Prudential and supervision standards such as rules on loan classification, and asset valuation have steadily moved towards international standards. Commercial banks have also progressively recovered, with an increase in capital adequacy ratio reaching over 14 percent. Thai banks' earning performance showed a steady improvement, with a net operating profit of 7 Billion Baht during the first half of 2001, a significant improvement from 3.6 Billion Baht for the whole of last year. Debt restructuring also progressed well, with the NPL ratio dropping from a high 45% at the end of 1998 to 39% in 1999, 18% in 2000, and reaching around 12% recently, in spite of some re-entry NPLs. Development for Monetary Policy Before I go on to discuss obstacles and challenges, let me briefly recap on the changes that have taken place regarding monetary policy since the 1997 crisis. After Thailand floated our currency in 1997, the Bank of Thailand recognized the need to search for a new and appropriate nominal anchor for monetary policy.
More recently in April, the Bank published the Code of Conduct for the Malaysian Wholesale Financial Markets to promote high standards of conduct and transparency in the domestic wholesale financial markets. The code is a binding obligation and it sets out the Bank’s 3/5  BIS central bankers' speeches  expectations for market participants to adhere to professional and ethical standards of conduct. The Bank views this standard as critical and timely in light of the incidences of ringgit-rate fixing misconduct and also involvement in the opaque NDF market. Another important aspect of preserving the integrity in the industry is by maintaining strict membership requirements for all participants. As an industry riding on trust as the main vehicle for business, the financial sector cannot afford to be tainted by the actions of a few bad apples. Any unscrupulous behaviour exhibited by a player should not be tolerated and be weeded out immediately from the industry. To protect the financial ecosystem, each organisation has the responsibility to investigate any misconduct and record the outcomes to allow other institutions in the market to make informed decisions on the ability of a person to serve with professionalism and integrity. In this regard, the Bank is currently pursuing an initiative that will mandate the sharing of employment references with future employers to mitigate the problem of ‘rolling bad apples’ within the Malaysian financial industry.