Prasarn Trairatvorakul: Outlook for Thailand at a time of economic uncertainty Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Thomson Reuters Forum, Bangkok, 21 February 2012. *  *  *  Distinguished guests, Ladies and Gentlemen, It is my pleasure to be the keynote speaker at this Thomson Reuters forum. This is a special opportunity for me to share my views on the “Outlook for Thailand at a Time of Economic Uncertainty.” At the outset, I would like to highlight that the Thai economic outlook for 2012 is likely to be strong in terms of projected GDP growth while pressure on inflation should be well- contained. Having said that, I know that all of you, especially those in financial markets, are well aware that in today’s fast-paced world we cannot be complacent. Positive outlooks, such as the one I just described, may change quickly. Today, my speech will focus on laying out the challenges, my assessment of the challenges, and our policy options going forward. First, let us turn to the challenges. Last year 2011 was a year of regaining poise and balance for monetary policy. One year ago, the global recovery had started to gain traction. Capital flows had begun to stabilize and became less uni-directional. The balance of risks had started to shift away from growth to inflation. As a result, the Bank of Thailand (BOT), and indeed, the majority of central banks in the region, normalized interest rates throughout most of the year.
But as I say, Hong Kong is a compassionate community, and we need to be in step with those values. 36. We will probably need to consider a similar tolerant approach in future with small businesses that are perhaps slow to adopt e-payment systems. 37. That brings us to the overall segment of start-ups, and companies moving into Hong Kong. These clients have complained a great deal about the difficulty of simply opening corporate accounts. 38. These complaints were potentially affecting Hong Kong’s reputation as a welcoming place for business. We took this very seriously, and we believe we managed to sort out some of the underlying problems. 39. But this is a classic example of the dilemma we all face – as industry players and as the regulator. We do not want awkward due diligence and know-your-customer procedures. But we cannot accept the reputational harm and the other possible costs if one of our leading banks cuts corners and is then found to be handling funds from illicit activities. 40. This challenge – balancing risk – will continue. Technology 41. Perhaps the main possible solution to the problem of growing complexity is technology. And that brings me to my next subject. 42. Most of us here can remember when basic online banking was a novelty, and how we faced new challenges in cybersecurity. In the years to come, we are going to see continued transformation. We have already issued licences for eight virtual banks. 43.