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Thailand: BoT makes internal changes to keep up
The Bank of Thailand aims to overhaul its working structure over the next three years to a cross-functional method from functional-based teams to overcome seven specific challenges caused by a transformative world.
“Over the next three years, the world is transforming at a faster pace. There will be plenty of volatility, uncertainty, complexity and ambiguity,” said governor Veerathai Santiprabhob.
The seven challenges are a digital financial world; a current framework and mechanism for overseeing financial stability; monetary and fiscal policy constraints from structural factors; high fluctuation in currency; cyber and technological risks; higher standards and expectations about environmental sustainability, social and governance; and the ability of the Bank of Thailand to maintain independence and credibility.
The financial system is rapidly being transformed by digital progress and the central bank must develop to keep pace. A central financial structure that is secure and stable that meets international standards is needed, he said.
Regulations need to be updated to match the digital financial world and financial business is encouraged to compete at a level playing field, he said, adding that risks outside the banking system and from the digital financial world must not affect the stability of financial and payment systems.
Given monetary and fiscal policy limitations, the monetary policy framework must be combined with other policy tools to achieve macroeconomic and financial stability goals. People must understand the policy implementations and adapt in an appropriate manner, said Mr Veerathai.
Amid the high fluctuation in the foreign exchange market, the private sector must be able to manage the exchange rate risk in a timely manner.
The currency exchange and regulatory frameworks must able to track capital movements.
International reserve management must facilitate an adjustment to the digital financial world and the changing global financial structure.
“If a new digital currency, such as Libra, is created, other new currencies will be able to emerge. The international reserve management related to allocation ratios may need to be reviewed,” he said.
Source: https://www.bangkokpost.com/business/1802019/bot-makes-internal-changes-to-keep-up