The Bank had some guidelines on the metrics it would tolerate - for example, there was an expectation that about one-third of deposits plus one-fifth of acceptances  10  should be matched by liquid assets. And the  Bank showed willing when it came to enforcing this, though notably only through moral suasion rather than any formal sanction. The Governor would sometimes meet the prospective leader of a bank should there be a change in leadership, and he would expect to be notified of any significant transactions, a fact that Samuel Montagu (whose business is part of HSBC’s private banking arm today) was sharply reminded of in 1957 when he 11  reportedly neglected to update the Governor on a potential M&A deal . Overall though, much of this interaction was based on courtesy rather than any expectation that the Bank’s approval was a pre-requisite or necessary. There was a relationship to be sure but it was all very informal; the terms supervisor and supervised would have sounded out of place. There were no hard and fast requirements and the approach was minimalist in style. 7  For example, through the granting of waivers on the publication of balance sheet data. Originally set up in 1914 to manage difficulties in payments between countries at the start of World War One. 9 Fforde, John.
Roles of the Bank of Thailand in developing the bond market A High-level Domestic Bond Market Development Steering Committee was set up by the Government in January this year. The committee is chaired by the Finance Minister and comprises high-level representatives from both the public and private sectors, including the Bank of Thailand. The aim of the committee is to promote the development of the domestic bond market in five key areas, namely, (1) the primary market (2) the secondary market (3) taxes (4) market infrastructure and (5) market information. As for the Bank of Thailand, we have been tasked with the responsibility to develop an active secondary market. To meet this challenge, the Bank of Thailand has mapped out a multi-year strategy from which our work plan for bond market development this year will focus on six areas. First is the development of the private repo market. The repo market will provide bond market participants with the tools to hedge their bond position, as well as to manage liquidity more effectively. The private repo market will also provide an important link between the money market and the bond market, meaning that liquidity in the secondary bond market can be substantially improved once a well-functioning private repo market is in place. Second, the Bank of Thailand will coordinate with the Thailand Securities Depository to set up a "Bond Lending and Collateral Management Unit" to activate the bond lending business. This again will help facilitate the private repo market and enhance overall market liquidity.