It is true that, to the extent that the present imbalance within the economy reflects sterling’s appreciation against the euro, we would have been protected against that. But, with accelerating inflation in the economy as a whole, the price of such protection of the suffering sectors would have been tantamount to real exchange rate appreciation, which would in any event have damaged their competitive position. And, it would not in that case be possible to reverse that effect through exchange rate adjustment. Joining EMU from the start would in fact, as things have turned out, have been a strong form of relaxing our objective for consistently low inflation in the economy as a whole to ease the pressures on the internationally-exposed sectors which I argued against a few moments ago. There are no easy answers so long as our economies continue to diverge. Coping with such tensions as may emerge within the Eurozone - with or without the UK - is likely to be easier in a context of structural, supply-side flexibility and adaptability - which also, as I say, essentially determines the underlying rate at which the economy can expand in the medium and longer-term. The Eurozone started with chronically high unemployment. Some countries still have very high ratios of public debt to GDP. And most face the prospect of an increasing burden on their public finances with ageing populations.
This current plan helps promote competition in the financial market. Continuity of these plans and implementation over several years has improved Thailand’s financial infrastructure, as indicated by lower cost-to-income of commercial banks. Progress is especially visible in the SME segment. Promoting competition among players in the banking sector has steered banks to seek more opportunity in this segment. At the same time, the Bank of Thailand has helped lay down infrastructure that reduces the asymmetric information problem in this segment by means such as setting up the SME Database. With the convincing results of the current plan which will end this year, the Bank of Thailand has recently set up a steering committee to look after the next phase, Financial Sector Master Plan Phase 3. In addition to Financial Sector Master Plan, the Bank of Thailand also encourages Thai companies and depositors to diversify their investments and promote financial market development through the implementation of Capital Account Liberalization Master Plan. As a result, there is increase in the number of Thai companies doing outward Foreign Direct Investment which allows capital as well as resources to be allocated more efficiently. 4  BIS central bankers’ speeches  At this point, it is important to note that resources and infrastructure built by the government and central bank are not sufficient in themselves to lift the economy’s growth potential. More importantly, financial institutions and businesses must utilize them and act as the main player that will drive the economy to its highest potential.