THAILAND
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INTERNATIONAL MONETARY FUND
16. The FSC would help address the potential conflict of interest and strengthen further
the accountability mechanisms present in the existing arrangements, including in the FIPC.
The FIPC is an
internal committee of the BoT, established under the BoT Act (BoTA) with
participation of the OIC, the SEC, five independent external appointees with market expertise, and
the MoF.
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The participation of other agencies in the FIPC (representing 3 out of the 11 members)
and the presence of external appointees has so far helped ensure an
effective oversight of an
increasingly interconnected financial system. However, since the MoF is the owner of all SFIs and
several large commercial banks, it has a conflict of interest in the decisions taken by the FIPC and
can potentially use its seat to gather information on future decisions and convince other members
against taking action. Furthermore, MoF’s participation in meetings and being a
party to the
deliberations in the FIPC could weaken its ability to perform an objective ex post assessment of the
decision taken by the BoT. In
addition, the presence of the SEC and the OIC can potentially dilute
accountability and delay decision making. Narrowing the membership of the FIPC and
shifting the
domestic inter-agency coordination to the FSC would help address these challenges.
FINANCIAL SECTOR OVERSIGHT
A. Macroprudential Policy
17. Significant progress has been made on the macroprudential framework and policies in
Thailand, but there is room for further improvement. The Financial Stability Unit (FSU) was
created within the BoT in 2016. While not
explicitly mandated, macroprudential authority lies
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The FIPC is in charge of macroprudential policy, has the power to monitor the implementation of supervision and
examination of and policies concerning financial institutions, and is in charge of crisis management decision making.
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