On the contrary, and since the very construction of the Euro was based on continuity with the most credible national currencies, it was foreseeable that interest rate convergence inside the future Euro area would take place progressively on the basis of a merge of different yield curves of the various currencies with the benchmark yield curve corresponding to the most performing and credible ones, as it effectively happened. The nay votes from France and the Netherlands to ratifying the EU constitution rattled Europeans concerns for the future. Some observers immediately conjectured that the single currency was directly responsible for the muted economic performance of the euro area and publicly questioned its durability; however, the track record of the Single monetary policy, after 8 years of implementation, has been really impressive: the inception of the euro has been so far associated with an increased macroeconomic and price stability within the euro zone, despite an unusual sequence of unfavourable events, adverse supply shocks and periods of global financial turbulences. The extent to which the recent episode of financial distress will affect the global outlook remains an open issue but the Eurosystem has demonstrated its ability to withstand such a shock as well as the effectiveness of its operational framework. The point I would like to set out today is that a high degree of credibility, transparency and predictability of the Eurosystem’s monetary policy is a key condition for its efficiency.
In this light, the Bank of Thailand is keen to collaborate with our regional counterparts to promote payment systems connectivity within the region. The third foundation is the work towards standardized rules and regulations. Given our countries’ diverse financial systems, the harmonization of rules and standards should be given a priority so as to strengthen financial interconnectedness on a sustained basis. In the same way that the airline industry harmonizes the regulation on cross-border supply of services, the finance industry should aim at employing internationally accepted principles on finance, which already exist, to help drive harmonization of rules and regulations. Take the payment systems for instance. Currently, different legacy systems among our countries mean that we are not able to “talk” with each other as seamlessly as we wish. Adhering to the same standards, such as the one on financial messaging schemes, can help overcome this challenge. At this stage, the work to achieve harmonization on diverse aspects of banking businesses is underway, and if completed, will make financial transactions within the region much easier. The fourth factor is human capital development. Financial professionals both working in the finance industry and regulators must be well equipped with a set of skills required to serve people of the region. The fast pace of technological and financial innovation indeed urges us to upgrade our capabilities in order to understand more complex financial activities and to cope with growing risks including those related to cyber security.