This would imply formal, systematic coordination between the different facilities to allow synchronised provisioning of liquidity during crises. Apart from the fact that any significant transfer of power from national to supranational authorities is extremely difficult to achieve, I am not yet convinced that a global financial safety net of this kind is necessary or even desirable. First, concerns about moral hazard must be taken seriously. Second, we have to be careful not to undermine established mechanisms at the national level. Finally, let us not forget that it is only the central banks that can create liquidity as needed. And their cooperation has proven to be very effective during the recent crisis. Let me now shortly outline the topic of the five panels of today’s conference. The first panel will discuss policy discipline and spillovers in an interconnected global economy. It will assess proposals for improving the surveillance of the system and global policy cooperation. The second panel will deal with global liquidity provision in systemic crises. It will evaluate the adequacy of currently available facilities and proposals on expanding them. The third panel focuses on capital flow management. It will follow up on the recently initiated discussion about a new, more uniform and balanced approach. The fourth panel will discuss the desirability and feasibility of a multi-polar currency and reserve system, and the fifth panel will wrap up and outline realistic objectives for 2011 and beyond. I am looking forward to a lively discussion and open exchange of views.
While the overall macroeconomic stability is sound, pockets of risk remain. In response, the Bank of Thailand took on a number of actions including implementation of new limits on credit card and personal loans to address problem of household debt; establishment of debt clinic to help restructure debt for individuals with multiple creditors; and tightening up of mortgage loan underwriting standards to curb speculation in the housing market. Along the same line, on the back of strong economic performance and ample liquidity, the Monetary Policy Committee raised the policy rate in December of last year largely to preempt potential build-up of financial vulnerabilities from investor’s “search-for-yield” behavior and underpricing of risk during prolonged period of ultra-low interest rate. Ladies and gentlemen, Let me now turn to the resilience supported by having diversified growth engines, which in turn enable the Thai economy and its agents to mitigate adverse events. While I previously stated at the beginning of my talk that drivers of growth have become more balanced, structurally—being a small open economy—export performance still plays an important role as the main growth driver. But, looking closely at our export portfolio, you would find that it is well-diversified and can provide cushion against marketspecific or product-specific risks. This is because Thailand has established export ties with over 80 countries; and exporters have become less reliance on major economies. Just over ten years ago, exports to G3 economies made up around 40 percent of total export value while those to ASEAN economies stood at 21 percent.