A Study On Financial Stability Of Thailand

From the point of Thai financial system, this paper first integrates and constructs an instrument to evaluate the financial system stability of developing countries based on the analytical framework of financial fragility evaluation "BLISHER":a "SBER" analysis framework including four elements. Then, this dissertation explores further about the Thai financial stability between 1997 and 2013 from the successive perspectives of financial system structures(S), sector balance sheets(B), external linkages (E) and financial regulations(R).A core viewpoint of this dissertation is that:during particular economic growth stages in developing countries, the financial system structure, sector balance sheets, external correlations and financial regulations paly a vital role in financial system stability. This research yields in the following academic contributions:(1)It explores in detail the impact mechanism of four core elements including financial system structures, the stability of sector balance sheets, external correlations and financial regulations on Thai financial system stability. (2) It discusses the relationship between financial structures and Thai financial stability from three layers of financial system structures, bank market concentration and bank homogenous behaviors respectively. (3) It thoroughly sorts out the debt scale, structure and risk situation of Thai government, enterprises and households. Dual analysis is made in the view of commercial banks’assets expansion and leverage. The conclusion is drawn that the overall Thai debt and leverage are within the security boundary but the issue of increased enterprise debts deserves our concern. (4) The impact of changes in the balance of payments on Thai financial stability under the quantitative easing policy is analyzed for the first time. The overflow effect of four-round American quantitative easing policy on Thai financial system stability should be decreasing until the reversal. (5) It reviews the efficiency of Thai financial reform and FSMP two-stage strategy after the crisis. Under the mode of mixed management in financial system, multi-sector financial regulation systems comprising of "double core" of Thai banks and The Ministry of Finance effectively maintain the Thai financial stability through successively regulating capital adequacy under the Basel Agreement.In terms of Thailand, in bank-dominated financial systems, four big universal banks function as market stabilizers. After the financial crisis in 1997, the Thai real economy and the balance sheets of financial institutions are entirely restored, overall debt burden and leverage are within the security boundary. Depending on the financial regulation systems which have strengthened the increasing risk orientation in recent years, Thai management level of financial system has deliberately increased. Meanwhile, the Thai central bank has better stabilized the financial system relying on huge foreign exchange reserves.