Bad banking in Thailand? An empirical analysis of macro indicators

It appears to be common wisdom that the basic cause of Thailand's crisis is its extraordinarily weak financial institutions. The article questions thi s proposition from an empirical viewpoint. It is well established that the long-term performance of Thailand's financial system is favourable. The ins ight from moral hazard indicators is unexpected regarding the bad banking p roposition, although not compelling. Finally, the liberalisation process pr oduced inadequately addressed risks. However this also applies to experienc ed and well-regulated foreign banks. It is argued that the facts provided c an be better explained in a framework of system change than by bad banking in Thailand.