Thailand: Financial Sector Reform and the East Asian Crises

This book takes as its focus the current supervisory and regulatory framework for bank supervision in Thailand and the Thai authorities' efforts to modernize and restructure the Thai banking system. It examines the obstacles to this restructuring, which include the current economic difficulties in Thailand and the East Asia region as well as more fundamental historical, cultural and socioeconomic factors that underpin Thai society. The book assesses the numerous banking statutes put in place in Thailand in the past 60 years, including legislation of the 1980s in response to problems involving fraud, insider dealing and solvency concerns. It examines how historically ambiguous structures of governmental responsibility and power and a heavy emphasis on government discretion in regulation have so far inhibited the effectiveness of this extensive body of legislation in developing a sound modern banking system.There follows an in-depth analysis of the 1997-1998 Thai Banking Crisis and ways in which lessons can be learned to avoid similar crises in future. The author argues for a greater degree of transparency in the regulatory process to bring it in line with internationally accepted standards, for increased supervisory implementation and enforcement by Thai governmental authorities, and for the ultimate depoliticization of the bank regulatory and supervisory processes.