Nonetheless, for the time being, the size of these adverse effects can only be estimated with an extraordinary degree of uncertainty. Naturally, this will depend on the severity and duration of the conflict. Second, in such an extraordinarily uncertain scenario, caused by a shock that has little to do with economic fundamentals, it is vital that economic policy should respond forcefully, providing support focused on the most vulnerable affected households, firms and sectors, as well as certainty. In particular, in response to a shock of this nature, the contribution of supranational European policies and national fiscal policies is fundamental. For their part, the latest decisions taken by the ECB are the result of an analysis that weighs up the different risks arising from the current context for our price stability target. The measures agreed strengthen the data-dependent nature of our decisions, increase the flexibility and optionality available in our various monetary policy instruments and provide certainty to economic agents as a whole, with a clear commitment to adopt all the measures that may be needed to fulfil the ECB’s price stability mandate and to safeguard financial stability. Third, the sharp rise in the prices of energy and certain other commodities at global level in recent quarters, which has intensified as a consequence of the conflict in Ukraine, entails for the Spanish economy – a net importer of these products – a negative shock to our terms of trade. This reduces national income and raises inflationary pressures in the near term.
Specifically, the  4  BIS Review 104/2007  latter Act will stipulate prompt corrective action and grant the Bank of Thailand power to conduct supervision on a consolidated basis. The current Financial Sector Master Plan (FSMP) will move into its second phase, with an emphasis on increased competition and consideration on potential entry of new players to further enhance financial efficiency and resiliency. Our accession to the Basel II accord will upgrade the risk management of banks to the best standard and will further enhance financial sector stability. Ladies and Gentlemen, To end my talk today, I would like to emphasize that policymakers must avoid misplacing the focus of policies just on short-term issues. They must instead always weigh very carefully between short-term and long-term objectives toward achieving strengthened resiliency of the overall economy. Only with such resiliency, will a small open economy like Thailand be able to sail through the waves of global financial turbulence in the years ahead. BIS Review 104/2007  5