The institution that is responsible for the settlement of payments between financial institutions gains a considerable influence over the payment system as a whole. If 4 [8]  the settlement of payments had been a branch characterised by substantial competition and low entry barriers, it would not have been problem. But as payment settlement is instead characterised by economies of scale and network effects, Sweden actually has to choose between a public monopoly and some form of private monopoly. Even a privately-owned infrastructure can be supplied in a competitively neutral way without creating monopoly profits, but it must in that case be accompanied by regulations, supervision and oversight which is once again an unnecessary detour if the infrastructure could just as easily be directly supplied by a central bank. I therefore believe that both financial stability and competition on the payment market would benefit from the Riksbank supplying a payment system that is available whenever the participants wish to use it. Platform sharing with other central banks is cost-effective Platforms for settling instant payments must be able to process a large number of payments, be accessible 24/365 and offer first-class continuity solutions. The systems are therefore expensive and complex to develop. We have not calculated in detail how much it would cost for the Riksbank to develop or procure a system for the settlement of instant payments, but simple business economics speak against this type of project. Payment infrastructures entail substantial fixed costs.
A key challenge confronting macroeconomic policy in Thailand is to safeguard the pace of recovery while maintaining macroeconomic stability and financial discipline, and at the same time continuing with the essential reforms. Past records Before moving on to discuss the challenges facing Thai monetary policy, I would like to review some of the notable progress of the last few years. There have been gains that should further be expanded. Macroeconomic and financial stability has been restored. Inflation remains low and stable. Thailand’s international reserve position is healthy. Surpluses in the external current account of these few years have been matched almost entirely by falls in external debt, especially short-term debt. Such reversed flows have been instrumental in avoiding a real currency appreciation and loss of competitiveness. BIS Review 70/2001  1  The surplus on the external current account is expected to continue this year, although at a somewhat lower level. This would allow the debt stock to fall further as scheduled repayments are made. About 50 percent of the existing non-bank private debt stock represents debt contracted after the crisis, including some rollovers which were done under new contract. This means that private sector in Thailand currently has no difficulties in gaining access to the international financial markets. Reflecting this, the spreads of Thai Government bond yields over US Treasuries have narrowed while Thailand’s sovereignty credit ratings remain stable. The financial system has now stabilized, but much work still lies ahead.