BOT chief aims to sharpen tools to counter risks

He also said the monetary transmission mechanism – the process by which asset prices and general economic conditions are affected as a result of monetary policy decisions – must be assessed regularly.
Stability is one of three key strategies under the BOT’s coming three-year plan (2017-2019). Veerathai stressed that rapidly changing risks meant the central bank’s examination and the monitoring systems must be more proactive, as it is the financial sector that is most at risk from cyber-crime.
The decision-making process on monetary policy must be deeper and must keep up with the rapid changes, he said.
More financial tools should be prepared to deal with unexpected risks, and the BOT will review the formats needed to ensure the stability of the financial system together with other relevant agencies.
He noted that the Cabinet had approved a draft law empowering the BOT to reinstate the role of the Financial Institutions Development Fund to collect money from banks for a fund to bail out troubled financial institutions. This is one of the tools that BOT believes can be used to reduce risk in the future.
The policy rate as well, he said and noted that the transmission mechanism of policy rate is likely to be followed by commercial banks, making several question the effective of monetary mechanism. But in fact, the effective of monetary mechanism has passed on the adjustment interest return in capital malarkey instead.
The capital market now is larger than the commercial banking market, hence, the transmission mechanism from monetary policy to the capital market is more seen that the financial institutions, he added. 
“We have to inform all stakeholders of the reasons for macro prudential policy,” Veerathai stressed.
Under its development strategy, the BOT will adjust regulations that encourage innovative financial services and will support niche players.
 In order to reduce financial gaps to customersThe BOT will support financial technology that enables information-based rather than collateral-based lending in order to increase access to funding for small and medium-sized enterprises.
Information-based lending is suitable for small businesses and e-commerce operators, Veerathai said, noting that in some foreign jurisdictions, information based on utilities expenses could indicate whether a business is eligible for financial support.
“We have to have a regulatory sandbox in which financial-technology operators and banks can experiment with new products and services to ensure that they will not create problems for the financial system. 
“The commercial banks have asked the BOT about the possibility of information-based lending, and the BOT expects this kind of lending and innovative financial products will be introduced in the next two or three years,” he said.
Meanwhile, the BOT will push for standardised infrastructure used by all banks in order to make service fees fair for all.
The same facilities are local debit card and while label ATM, which the trend of cashless and digital payment, ATMs might not response the usage. The banks also aware this matter as well due ATM sued to be the profit centre for the banks but the high cash management while the cash withdrawal from ATM machines are declined, ATMs have become a cost centre for banks instead. The Thai Bankers’ Association has talked this matter with bank members about the sharing ATMs. However, this might be take time because each bank have invested much in installing ATM machines in the past.Veerathai said the BOT must strengthen its organisation, including the provision of succession pathways to overcome a lack of personnel in the middle executive ranks. 
The bank needed to better prepare junior executives for more senior roles, by developing their skills through initiatives such as staff rotation.and deal with generation gaps. He added that the central bank lacked personnel at the mid-executive level, so it needed a succession plan and to prepare talent, build their skills and rotating employees to increase productivity in order to ensure they have the necessary skills for the digital era.