To illustrate my points, let me use the work that the Bank of Thailand has been engaging with the financial institutions during the past couple of years. We have provided guidelines to improve corporate governance within the Thai financial sector to complement the on-going change within the corporate sector. Bank directors are now required to have no more than 3 directorships in other profitseeking institutions, so that they will have more time to carry out the required duties, as directors should do. Before, 82 directors did not qualify, but 60 of those have now complied. And for the rest, arrangements were made for them to observe the guideline. To improve internal management, we ask major shareholders not to vote for the independent directors so that minority shareholders are better represented on the board. Audit committees are now a requirement and many banks now have nomination and compensation committees to reduce the power of the major shareholders. Most also have risk management committee or, at least, asset and liability management committee. To further increase transparency, commercial banks now have to announce at the end of each month their NPL level, penalties and fines imposed by the authorities, as well as the amount of their related lending. By year-end, we will launch the Director's Handbook for the financial community and further encouraging increased transparency of appointment and compensations. Of course, we cannot change others without changing ourselves at the Bank of Thailand.
On this front, Thailand has done remarkably well, registering a substantial increase in net inflow of foreign direct investment in the four years following the crisis despite the overall net capital outflow due to debt repayment within the banking sector. Foreign direct investment (to the non-bank sector) increased from an average around 1.4 billion US dollars during 1992-1996 to 3.4 billion US dollars during 1997-2000. Though much work is required on the corporate sector in the march toward modernization of the Thai economy, the government and the central bank also have vital roles in maintaining stable economic environment and providing the required infrastructures to allow the private sector to drive forward to create wealth and prosperity. Several long-term plans have been made in the past couple years. On the macroeconomic front, the Bank of Thailand has adopted Inflation Targeting as a framework of our monetary policy since May 2000. It may be a little too early to claim our success, but the results thus far have been encouraging. Long-term interest rates of the interpolated 14-year government bonds were reduced from 8.3 percent at the beginning of 2000 to currently at 6.1 percent. Inflation remained subdued and will stay within the target range during the next two years. The maturity of state enterprise debentures offered in the market increased from a maximum of 7-year in 1998 up to 20 years in 2000, reflecting greater confidence on the long-term economic stability.