This is shown in the light blue bars, in which the probability of a crisis is 0.5pp higher than with reciprocity, despite policymakers choosing to increase the countercyclical buffer a little more. This feature of reciprocity – that it allows both countries to reduce the probability of a crisis by more than if they were acting alone – can be thought of as “enlightened self interest.”  12  And it is one of the reasons why it  was built into the international framework for the countercyclical capital buffer. As part of the Basel III framework, reciprocity is mandatory for all Basel Committee member jurisdictions, and the BIS maintains a website where information on countercyclical capital buffer decisions of all participating countries is captured and which banks can use to calculate their institution-specific requirements. And reciprocity of the countercyclical capital buffer is a legal requirement in the European Union under CRD IV. 13  Reciprocity also helps address the old problem of asymmetric adjustment of global imbalances. Suppose a deficit country wishes to contain the supply of credit and build resilience in its financial system by raising the buffer. If a surplus country whose banks are lending to the deficit country reciprocates, its banks should be incentivised to lend less to the deficit economy, and more to their domestic economy. That should increase domestic demand in the surplus country, and hence demand for deficit country exports, reducing the overall level of imbalances.
These initiatives would further strengthen the stability of financial institutions, laying the foundation for stronger financial system and economy in the longer term. To increase the efficiency of the payment system, the BOT has launched the Imaged Cheque Clearing and Archive System (ICAS), for Bangkok and its vicinity since February 2012. In addition, the Financial Consumer Protection Center (FCPC) was set up to provide information about the BOT, to receive consumers’ complaints regarding financial services, and to offer financial education to the public, all of which have been well received. Economic outlook in 2013 Looking ahead, risks to growth have declined on the back of firmer, if moderate, global recovery, and robust domestic demand which continues to be the main growth driver for the Thai economy. Private consumption would continue to benefit from the first-car tax rebate program as well as the reduction in personal income tax which would take effect this year. Furthermore, private investment continues to expand steadily on positive growth prospects, post-flood reconstruction in some parts of the manufacturing sector, and various government stimulus measures. Meanwhile, exports started to show signs of a broadbased recovery, and should pick up pace in the latter half of this year, lending an additional support to growth momentum as the effect of government’s stimulus wanes. Inflationary pressure meanwhile should remain contained.