With all these measures in place, we expect further progress in the resolution of the NPL problem next year. With regard to the intervened banks, two have been sold to new investors. The remaining two are in the process of identifying new potential partners which are most likely to be finalised next year. As for the existing Thai banks, the policy framework emphasised by the government is to encourage mergers, such as in the case of Bank Thai, which will help to preserve Thai-owned financial institutions. In this regard, in the case of those banks which have already been sold, the authorities have imposed the condition that they remain listed in the local stock market. And even in the case of the financial institutions which have switched to foreign investors, and for which permission for exiting the local stock market has been granted, the move to exit the stock market has been halted. As for the financial obligation of the FIDF, there is now a clear solution to the problem. The Ministry of Finance will provide a guarantee for the FIDF bonds to the amount equivalent to the loss incurred by FIDF in the first year and for the estimated losses in the following years. The preliminary amount of the  2  BIS Review 6/2001  losses is currently estimated at B880 billion, with the first lot of government guaranteed FIDF bonds expected to be issued in the first quarter of next year.
The decision-making process now evolves around decision-making by a committee rather than relying on individuals as in the past. In some of the committees, well-qualified individuals from outside the Bank of Thailand have been invited to be members. Between each committee, emphasis has been put on the ability to communicate and exchange information. The change in this decision making process has resulted in the implementation of policies based on collective decision-making, accuracy and up to date information, most importantly, the co-ordination between the committees has helped reduce policy inconsistency. On monetary policy, following the change to a floating exchange rate system, there was a need for a new monetary policy framework. On this issue, the Bank of Thailand believes that the Inflation Targeting framework, which is being used today, is very appropriate to the present conditions and is well suited for Thai economic and monetary structures. Keeping inflation at a low level is an important pre-condition in maintaining economic stability of the country in the long run. Most importantly, under this framework, the Bank of Thailand must set clear monetary policy targets, be transparent in its decision-making, and accountable for its policies. The Bank of Thailand Monetary Policy Board announces its decision every six weeks, and so far has published two Inflation Reports. At present, the new monetary policy framework has been accepted at a certain level. More importantly, for it to be highly successful and efficient, the Bank of Thailand must be independent in implementing its policies.