This paper deals with Thailand’s recent experience in managing payment and settlement system reform. It discusses the major types of the payments and settlement system reforms in Thailand and the rationales behind the implementation of such reform measures. Particular emphasis is given to the discussion of the contribution of the system reform for large-value transactions under the BAHTNET, along with a number of supporting policy measures, in reducing risks involved in the payment system. The results suggest that the shift to the BAHTNET system is a significant reform in the domestic payment and settlement system that has contributed greatly to the reduction of various types of risks, particularly those of systemic risk. The paper also explores possible options in managing risks in foreign exchange settlement. It concludes with comments regarding future developments and challenges related to the payments and settlement system reforms in Thailand
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