Govt retrieves currency bill
The Nation (10 October 2007)
After the Cabinet yesterday withdrew for the second time the draft Currency Act from the National Legislative Assembly (NLA) for more revision, the Bank of Thailand said it agreed with the amendments suggested by critics. Assistant governor Suchada Kirakul said the central bank would follow Finance Minister Chalongphob Sussangkarn's policy to revise the provision in the bill that allows the central bank to invest in more channels. Earlier, Chalongphob had withdrawn the bill from the NLA in fear that some NLA members would vote it down. He revised the bill in some details before proposing it to the NLA again last week. This time, critics again warned that Section 16, which allows the central bank to invest in more financial instruments, would be too risky for Thailand's international reserves. According to the current draft, investment channels would be increased to include secured bonds with higher returns in order to maintain international reserves. Sovereign bonds issued by large countries, in which the central bank is allowed by current law to invest, have offered low returns because of short supply but high demand, Suchada said. "How he [Chalongphob] is satisfied, that's it. We have tried to maintain the value of international reserves as required because burying them in a jar produces nothing," she said. The investment-expansion clause to be withdrawn from the bill allows the central bank to invest in various financial instruments issued by international organisations of which the Kingdom is not a member. It also allows the central bank to invest in other secured financial instruments that have been developed largely throughout the world. Suchada said the central bank had "security" as the top priority of its investment policy, followed by liquidity. The new channels are secured financial instruments but provide higher returns than US government bonds. For example, bonds issued by the European Investment Bank are highly rated and also provide relatively high returns, but the central bank cannot put money into this because the Kingdom is not a European country. Suchada said if the central bank obtained higher returns, it could contribute more revenues to the government. This would save taxes from compensating the Financial Institutions Development Fund's burden. Meanwhile, auditors are required to protect the interests of shareholders. The Cabinet yesterday approved a change to the Securities and Exchange Act that will require auditors to inform the Securities and Exchange Commission (SEC) if they suspect that executives of listed firms might have tried to seek personal gain at the expense of shareholders, said deputy government spokesman Chodechai Suwannaporn. The Cabinet also agreed to a Finance Ministry proposal to provide Bt1.5 billion for the creation of an independent insurance regulator. Among the new commissioners are economist Narongchai Akrasenee, former Commerce permanent secretary Karun Kittastaporn and former senior Finance Ministry official Kovit Posayanond. The Cabinet also approved a draft amendment of the Securitisation Act, aimed at promoting asset-backed securities.
The Nation (10 October 2007)
After the Cabinet yesterday withdrew for the second time the draft Currency Act from the National Legislative Assembly (NLA) for more revision, the Bank of Thailand said it agreed with the amendments suggested by critics. Assistant governor Suchada Kirakul said the central bank would follow Finance Minister Chalongphob Sussangkarn's policy to revise the provision in the bill that allows the central bank to invest in more channels. Earlier, Chalongphob had withdrawn the bill from the NLA in fear that some NLA members would vote it down. He revised the bill in some details before proposing it to the NLA again last week. This time, critics again warned that Section 16, which allows the central bank to invest in more financial instruments, would be too risky for Thailand's international reserves. According to the current draft, investment channels would be increased to include secured bonds with higher returns in order to maintain international reserves. Sovereign bonds issued by large countries, in which the central bank is allowed by current law to invest, have offered low returns because of short supply but high demand, Suchada said. "How he [Chalongphob] is satisfied, that's it. We have tried to maintain the value of international reserves as required because burying them in a jar produces nothing," she said. The investment-expansion clause to be withdrawn from the bill allows the central bank to invest in various financial instruments issued by international organisations of which the Kingdom is not a member. It also allows the central bank to invest in other secured financial instruments that have been developed largely throughout the world. Suchada said the central bank had "security" as the top priority of its investment policy, followed by liquidity. The new channels are secured financial instruments but provide higher returns than US government bonds. For example, bonds issued by the European Investment Bank are highly rated and also provide relatively high returns, but the central bank cannot put money into this because the Kingdom is not a European country. Suchada said if the central bank obtained higher returns, it could contribute more revenues to the government. This would save taxes from compensating the Financial Institutions Development Fund's burden. Meanwhile, auditors are required to protect the interests of shareholders. The Cabinet yesterday approved a change to the Securities and Exchange Act that will require auditors to inform the Securities and Exchange Commission (SEC) if they suspect that executives of listed firms might have tried to seek personal gain at the expense of shareholders, said deputy government spokesman Chodechai Suwannaporn. The Cabinet also agreed to a Finance Ministry proposal to provide Bt1.5 billion for the creation of an independent insurance regulator. Among the new commissioners are economist Narongchai Akrasenee, former Commerce permanent secretary Karun Kittastaporn and former senior Finance Ministry official Kovit Posayanond. The Cabinet also approved a draft amendment of the Securitisation Act, aimed at promoting asset-backed securities.
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