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Asia and Pacific > Thailand

You are looking at 1 - 10 of 45 items for :

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Cover IMF Staff Country Reports
Thailand: Selected Issues
International Monetary Fund. Asia and Pacific Dept
Selected Issues
Keywords:
export sophistication; insolvency regime; NDC roadmap; emissions trend; resource reallocation; Greenhouse gas emissions; Debt restructuring; Solvency; Carbon tax; Global; Asia and Pacific
Cover IMF Working Papers
Leakages from Macroprudential Regulations: The Case of Household-Specific Tools and Corporate Credit
Lucyna Gornicka
and
Peichu Xie
Sector-specific macroprudential regulations increase the riskiness of credit to other sectors. Using firm-level data, this paper computed the measures of the riskiness of corporate credit allocation for 29 advanced and emerging economies. Consistently across these measures, the paper finds that during credit expansions, an unexpected tightening of household-specific macroprudential tools is followed by a rise in riskier corporate lending. Quantitatively, such unexpected tightening during a period of rapid credit growth increases the riskiness of corporate credit by around 10 percent of the historical standard deviation. This result supports early policy interventions when credit vulnerabilities are still low, since sectoral leakages will be less important at this stage. Further evidence from bank lending standards surveys suggests that the leakage effects are stronger for larger firms compared to SMEs, consistent with recent evidence on the use of personal real estate as loan collateral by small firms.
Keywords:
standards survey; credit vulnerability; leakage effect; credit riskiness; bond credit ratio ma; Credit; Macroprudential policy; Bank credit; Macroprudential policy instruments; Corporate sector; Global
Cover IMF Working Papers
Caught in the Crosswinds: The Experiences of Selected Economies Responding to External Volatility with Multiple Policy Levers
Ms. Ghada Fayad
A case study approach is used to assess the multi-pronged policy response of seven small financially open economies with flexible exchange rate regimes to external shocks following the global financial crisis. FX intervention was frequently used— including during outflow episodes to prevent disorderly depreciation and preserve financial stability. Monetary policy often considered both financial and external stability. Capital flow management measures were sometimes calibrated symmetrically over the cycle while macroprudential measures were mostly deployed during inflow episodes. Assessment of the macroeconomic conditions paints an inconclusive picture on the benefits or costs of such policies, suggesting the need for further analysis.
Keywords:
emerging markets; monetary and exchange rate policies; inflation targeting; foreign exchange intervention; capital flows; macroprudential measures.; WP; monetary policy decision; exchange rate volatility; inflation targeting regime; monetary policy independence; FX turnover BIS data; macroprudential measures; inflation expectation; depreciation pressure; Inflation; Exchange rates; Financial sector stability; Depreciation; Central bank policy rate; Africa; Global
Cover IMF Working Papers
Tackling Private Over-Indebtedness in Asia: Economic and Legal Aspects
Jose M Garrido
,
Miss Sanaa Nadeem
,
Nagwa Riad
,
Anjum Rosha
,
Ms. Chanda M DeLong
, and
Ms. Nadia Rendak
One consequence of interest rates remaining “too low for too long” since the Global Financial Crisis is the buildup in private leverage in emerging economies. These vulnerabilities have been laid bare by the COVID-19 shock. This paper employs the growth at risk framework (Adrian, Boyarchenko, and Giannone, 2019) to examine how different types of private leverage present risks to future GDP growth in Asian economies. We find evidence that private leverage can boost GDP growth in the near term, but can increase the risks of low growth over the medium term. For our sample, we also find that household debt poses a larger drag on future GDP growth than corporate debt. In the second part of the paper, we provide an overview of a strategy for prevention and resolution of over-indebtedness, with a focus on legal tools, and with considerations to account for the consequences of the COVID-19 pandemic. Using a novel cross-country survey, we examine the role of legal techniques to prevent and treat corporate and household over-indebtedness, benchmarking those in ASEAN-5, China, India, Japan and Korea against international best practice. The analysis can inform a country-specific prioritized approach to strengthening legal frameworks.
Keywords:
WP; household debt; legal system; debt enforcement; enterprise debt; restructuring mechanism; resource allocation; reorganization procedure; debt restructuring; disposable income; repayment plan; enterprise liability; a number of debt-restructuring option; Solvency; Debt restructuring; Legal support in revenue administration; Corporate insolvency; Credit; Global; Private debt; corporate debt; legal frameworks; insolvency; household debt expansion; Asia and Pacific
Cover IMF Working Papers
Synergies Between Monetary and Macroprudential Policies in Thailand
Ichiro Fukunaga
and
Manrique Saenz
A dynamic stochastic general equilibrium (DSGE) model tailored to the Thai economy is used to explore the performance of alternative monetary and macroprudential policy rules when faced with shocks that directly impact the financial cycle. In this context, the model shows that a monetary policy focused on its traditional inflation and output objectives accompanied by a well targeted counter-cyclical macroprudential policy yields better macroeconomic outcomes than a lean-against-the-wind monetary policy rule under a wide range of assumptions.
Keywords:
WP; monetary policy; loan; Taylor; housing loan; x inflation gap; Macroprudential policies; Lean-against-the-wind monetary policy rule; Dynamic stochastic general equilibrium model; Thailand; world interest rate; LTV rule; household LTV cap; Macroprudential policy instruments; Macroprudential policy; Financial sector stability; Housing; Inflation; monetary policy transmission; inflation stability; inflation gap; world interest rate shock
Cover IMF Staff Country Reports
Thailand: Financial Sector Assessment Program-Technical Note-Risk Assessment
International Monetary Fund. Monetary and Capital Markets Department
This technical note on the risk assessment for Thailand discusses that the Thai banking system shows a substantial resilience to severe shocks. The solvency stress tests indicate that the largest banks can withstand an adverse scenario broadly as severe as the Asian financial crisis. While three banks would deplete their capital conservation buffer (CCB) under the adverse scenario, recapitalization needs would be minimal. A battery of complementary sensitivity stress tests, which allows to cover in more detail certain risk factors, also confirmed the overall picture of a resilient baking system: no particular vulnerability emerged from the analysis of the bond portfolio to an increase in government and corporate spreads, exposure to foreign exchange risk, and concentration risk in the loan portfolio, with the possible exception of one entity with a particular concentration on single-name exposures. The liquidity stress test on investment funds (IFs) showed that they would be able to withstand a severe redemption shock and its impact on the banks and the bond market would be limited.
Keywords:
ISCR; CR; investment funds; central bank; fund family; liquid asset; fixed income; interest rate; mutual fund; banking sector; foreign exchange; sensitivity analysis; Stress testing; Mutual funds; Commercial banks; Currencies; Liquidity requirements; Global
Cover IMF Staff Country Reports
Thailand: Financial Sector Assessment Program-Detailed Assessment of Observance-Basel Core Principles For Effective Banking Supervision
International Monetary Fund. Monetary and Capital Markets Department
This Detailed Assessment of Observance on the Basel Core Principles (BCP) for effective banking supervision on Thailand highlights that there have been significant enhancements to the legal framework and the supervisory process since the last BCP review, resulting in high compliance. The commercial banking sector appears to be sound and stable with a diversified lending profile and a steady source of funding. The involvement of other ministerial authorities in Specialized Financial Institutions supervision may affect standard-setting processes and the mindset of key decision makers for commercial banks when trying to level regulatory standards. The supervisory framework and practices provide the foundation for the continued development of risk-based supervision. Notifications and examination manuals increasingly focus on analysis of qualitative factors such as governance, risk management and risk appetite statements to determine the bank’s composite rating. The report recommends that efficiency of enforcement actions would be increased by aligning Financial Institutions Business Act requirements and Bank of Thailand internal practices.
Keywords:
ISCR; CR; BOT supervisor; risk management; BOT notification No. FPG; senior management; risk profile; credit risk; parent company; business strategy; Trade balance; Market risk; Commercial banks; Stress testing; Operational risk; Global; Asia and Pacific
Cover IMF Staff Country Reports
Thailand: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Thailand
International Monetary Fund. Asia and Pacific Dept
This 2019 Article IV Consultation discusses Thailand’s robust policy framework and ample buffers continue to underpin its resilience to external headwinds. The authorities have taken measures to strengthen medium-term fiscal management and financial stability. With respect to the outlook, growth is projected to slow down to about 3 percent in 2019–20 reflecting external and domestic headwinds. On the external side, the projected slowdown in global demand and uncertainty about trade tensions are expected to weigh on exports throughout 2019. Policies should aim at boosting growth, while promoting domestic and external rebalancing and making growth more inclusive. The IMF staff recommends a front-loaded fiscal impulse in FY 2020. Thailand should use available fiscal space judiciously to spur domestic demand and support potential output. Implementation of macro-critical public infrastructure projects would also crowd in private investment. The report also highlights that structural reforms aimed at improving the implementation of public investment, strengthen social safety nets, and raise productivity in an increasingly digital economy, would boost growth and enhance its inclusiveness.
Keywords:
ISCR; CR; U.S. dollar; government; headline inflation; housing loan demand; National Anti-Corruption Strategy; training scheme; Thai baht; condo price; Financial sector stability; Trade balance; Commercial banks; Global
Cover IMF Staff Country Reports
Thailand: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
This Financial System Stability Assessment paper on Thailand highlights that assets of the insurance and mutual fund sectors have doubled as a share of gross domestic product over the last decade, and capital markets are largely on par with regional peers. The report discusses significant slowdown in China and advanced economies, a sharp rise in risk premia, and entrenched low inflation would adversely impact the financial system. Stress tests results suggest that the banking sector is resilient to severe shocks and that systemic and contagion risks stemming from interlinkages are limited. Financial system oversight is generally strong, but the operational independence of supervisory agencies can be strengthened further. The operational independence of supervisory agencies can be strengthened further by reducing the involvement of the Ministry of Finance in prudential issues and ensuring that each agency has full control over decisions that lie within its areas of responsibility.
Keywords:
ISCR; CR; financial system; U.S. dollar; bank; bank resolvability assessment; cash flow; hurdle rate; recovery plan; bank distress; resolution planning; headline inflation; asset quality; Trade balance; Commercial banks; Financial sector stability; Liquidity stress testing; Macroprudential policy instruments; Global
Cover The ASEAN Way
The ASEAN Way
Sustaining Growth and Stability
Ms. Ana Corbacho
and
Mr. Shanaka J Peiris

Abstract

The first part of the book examines the evolution of monetary policy and prudential frameworks of the ASEAN­5, with particular focus on changes since the Asian financial crisis and the more recent period of unconventional monetary policy in advanced economies. The second part of the book looks at policy responses to global financial spillovers. The third and last part of the book elaborates on the challenges ahead for monetary policy, financial stability frameworks, and the deepening of financial markets.

Keywords:
BOOK; monetary policy; exchange rate; economy; inflation expectation; transmission mechanism; monetary policy framework; ASEAN economy; Association of Southeast Asian Nations-5; inflation-targeting regime; Macroprudential policy; Financial sector stability; Inflation; Foreign exchange intervention; Global; Asia and Pacific; North America; Southeast Asia; Europe; countercyclical monetary policy; Global financial crisis of 2008-2009; Caribbean