Let me first touch upon some of the ongoing reforms and give you a better picture of what we could expect to benefit from them. Among various initiatives to upgrade legal infrastructure in Thailand, steps have been taken to put in place more efficient and more business-friendly laws and regulations. The new Licensing Facilitation Act will help streamline bureaucratic processes in obtaining a business license, registration and approval. The Business Security Act will help improve SMEs’ access to bank loans by allowing more  BIS central bankers’ speeches  3  types of assets to be used as collaterals. The new Payment System Act will unify all related laws governing the payment system and lift its standards to international best practices. In addition, the law to reform the governance structure of state-owned enterprises is underway. The success of this reform will not only improve the performance and transparency of state-owned enterprises (SOEs), but also unlock the potential of our country’s strategic assets, create a more level playing field between SOEs and private businesses, and strengthen the country’s overall competitiveness. I believe that these developments have a great potential to improve administrative efficiency and make doing business in Thailand easier. The legal reform will be here to stay regardless of which political party comes into power after the next election. Moreover, with the introduction of changes in the Board of Investment’s criteria for investment privileges, the government has geared up its effort in promoting high value added industries.
The second factor driving market volatility stems from the plunge in prices of oil and commodities. Depressed prices put pressures on commodity-exporting countries and related industries. For oil producers, the prolonged low prices would also result in losses in  BIS central bankers’ speeches  1  revenue and profitability, and increase risks of default on their debt payments. These could trigger another rout of credit events and liquidity tightening in financial markets. The third factor is the monetary policy divergence between the US and other major advanced economies. While the US Federal Reserve is poised to gradually tighten its policy stance, the Bank of Japan recently joined the club of many European central banks to adopt a negative interest rate policy, and is likely to ease the policy even further. Amid the fragile global recovery, the divergence in the monetary policy stance as well as in the recovery paths among the major economies cause a great deal of global uncertainty, and prompt capital flows to be overly sensitive to news and even slight changes in market expectations. In this highly interconnected world, these global risks surely have widespread spillovers to all countries not least emerging markets, Thailand included. But, the impact on the Thai financial markets, as you might have seen, has so far been relatively limited, compared to other emerging markets, thanks to Thailand’s strong external position which serves as a great buffer against global volatility.