The assumption also made it difficult to assess our forecasts and to compare them with those of other forecasters. Moreover, it gradually became clear that this rule could sometimes be an obstacle to our communication. Too much focus was on the current interest rate decision and the inflation forecast exactly two years ahead. On the other hand, neither the general public nor the financial markets received any clear guidance as to how we viewed interest rate developments further ahead. As our credibility increased, we gradually gained greater scope to conduct more flexible monetary policy. This also led to a greater need to show that it is the entire expected sequence of events for inflation and the real economy a few years ahead that is important to monetary policy decisions, and not merely the  4  See, for instance, Blinder, A.S., (2006), ”Monetary Policy Today: Sixteen Questions and about Twelve Answers”, paper presented at the Banco de España Conference on “Central Banks in the 21st Century, Madrid, June 8-9, 2006 and Kontulainen, J., D., Mayes and J., Tarkka, (2004), “Monetary Policy Assumptions in Central Bank Forecasts”, Bank of Finland Bulletin 4, 2004. 5  However, the monetary policy decisions made by the central banks always apply to only the current level of the policy rate, that is, the level that will apply until the next decision is taken. There are some expectations.
Prasarn Trairatvorakul: Journey towards a more competitive, inclusive, connected and sustainable Thai banking system Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Association of International Banks (AIB) Dinner Talk, Bangkok, 21 May 2015. *  *  *  Ladies and gentlemen, It is a great pleasure for me to be here on this special occasion. The topics I addressed in previous occasions focused on economic situations and developments. So much has been said and discussed on those issues, so today I would like to talk about the future development of the banking system in Thailand which is equally important. As many of you here are already aware, we are drafting the third Financial Sector Master Plan which will cover the next five years time span. The process is quite challenging because it involves many stakeholders, both in the public and private sectors, including foreign banks like yourselves. We thank you for your suggestions and feedback provided individually and also as a group through the AIB. Today I will share with you briefly the concept and aspiration behind the development plan for the banking system in Thailand. Thailand is currently at a crossroad in need of structural reforms to cross over the middle income trap. This requires commitment from all stakeholders. The public sector is already taking the lead on infrastructure development to promote urbanization and more equitable income distribution. For the private sector, they will need to make a transition toward production with innovation and higher value-added.