It was during that time that we came to recognize that the relationship among monetary aggregates, inflation, and output in Thailand did not have sufficient stability and predictability to make monetary aggregates a good nominal anchor of our monetary policy. Inflation targeting then appeared as a natural choice for our new monetary policy regime. From that day onward, price stability has become the Bank of Thailand’s overriding policy objective. The core inflation rate was, as it is now, to be kept within a 0-3.5 percent range. When Thailand adopted an inflation target some six years ago, the policy regime was a relatively uncharted territory for emerging market economies. Although the history of inflation targeting dates back to 1990 with the adoption of an inflation target by the Reserve Bank of New Zealand, prior to 1998, inflation targeting was pursued mostly by developed economies. The first substantial crosscountry study of inflation targeting, published by Ben Bernanke, Thomas Laubach, Frederick Mishkin and Adam Posen, who is here today, in 1999, was mainly about inflation targeting experiences of developed economies, with the exception of Israel. The situation looked vastly different from today where emerging market inflation targeters outnumber developed market ones. Ladies and gentlemen, Six years may be too short to claim definite success for inflation targeting in Thailand. Nevertheless, inflation targeting as a monetary policy framework has served us well over the period. When we first adopted an inflation target, our economy was still very much affected by the 1997 crisis.
Let me give a recent example. One major lesson from the great financial crisis was the need to be far better at identifying the many entities and organisations operating within the financial system. When the crisis hit, the lack of any uniform international method of identifying the huge number of legal entities scattered across the world added to the crippling uncertainty over who owed what to whom. We all remember that uncertainty causing panic on the financial markets. So was born the Legal Entity Identifier, or LEI – a 20-character alphanumeric code that uniquely identifies a legally distinct entity. It allows data relating to a single bank, insurer or whoever, to be combined. Over one and a half million entities in over 200 countries have now registered for an LEI. And it has had a wide range of benefits. It has supported the portability of data between organisations. It has aided the fight against money laundering. And it has been helpful in our data collections: for example, when we ask firms to submit counterparty exposure data to us, it provides a clear way for us to compile data about each entity. So the LEI is a growing success. But it also demonstrates that the adoption of standards is a long journey, with a continued need for public sector involvement. The G20 endorsed the LEI system as a global standard back in 2012. It has come a long way since then, but it still has further to go, and we will continue to support it.