Flexibility, maintaining the public's trust and focusing on risk management are among the key factors that will help the Bank of Thailand deal with the challenges in the fast changing landscape and ensure the country's monetary stability, former Bank of Thailand governors said on Monday.
Some of them expressed the view that Thailand needs to rethink and reform its governance to support sustainable economic growth.
The central bank hosted the event for six former governors to share their experiences and the challenges in managing the bank, aiming to offer valuable lessons for ensuring monetary stability and formulating policies for the present and the future.
They are Chaiyawat Wibulswasdi, MR Pridiyathorn Devakula, Prasarn Trairatvorakul, MR Chatu Mongol Sonakul, Tarisa Watanagase and Veerathai Santiprabhob.
Mr Prasarn said besides dealing with the real sectors, the country should also promote good governance.
He added that people think Thailand does not have good governance, so this discourages reform of the real sectors.
He said leadership of both the central bank and the bank's governor is a key principle ensuring trust in the organisation for all stakeholders, and it would open the Bank of Thailand to conducting monetary policy properly and in accordance with each economic situation.
According to MR Pridiyathorn, the central bank should also play a key role on collaborating with the government and regulatory bodies, including the Ministry of Finance.
The Bank of Thailand needs independence on monetary policy management and to maintain a balance economic growth and financial stability. At the same time, the central bank should also respect and cooperate with the Finance Ministry.
"Besides not depending on political power or politicians, the central bank also needs to listen to the others and collaborate with them," he said.
Balancing fiscal policy and monetary policy is a tool for economic management, especially amid the crisis. However, he added that it seems there is no fiscal policy now and the government has just continued to spend without a fiscal policy.
Mr Chaiyawat said he is quite concerned about fiscal policy management amid rising public debt and fiscal deficit. Even though Thailand does not face a twin deficit as it did during the 1997 economic crisis, Thais have been familiar and have relied on populist policies for quite a long time under several fiscal schemes.
Fiscal policies have hidden several structural problems. If there is no clear direction to solve fiscal problems, the burden will fall on the monetary policy, he added.
Mrs Tarisa said one of the lessons she learned during her stint at the Bank of Thailand is that the general public understood and would support what the central bank did if it did the job with good governance and communicated well with the public. All of these will make people feel confident in the bank's decisions and policies.
Looking forward, Mrs Tarisa said the Bank of Thailand's main role is to promote monetary stability with a view to promoting sustainable wellbeing of the people. The central bank will have to focus more on risk management amid rising global uncertainties.
Mr Veerathai said the central bank should continue to adapt to the fast changing environment and dare to do what it has to do as regulator. Moreover, it has to be a far sighted organisation that maintains the trust of the people.
