BANGKOK--FEB 26--TRIS
The warning from Moody's Investors Service (Moody's) that it
would review the long-term foreign currency ratings of five Thai banks and
financial institution as well as the Thai sovereign for bonds and deposits
has caused concern that it would affect Thailand's financial system with
higher funding cost. The five banks and financial institutions under review
are the Bangkok Bank, Siam Commercial Bank, Thai Farmers Bank, Export-
Import Bank of Thailand (EXIM) and Industrial Finance Corporation of
Thailand (IFCT), all of which now have A2 ratings.
Moody's concern stems from rapid increases in Thailand's short-
term foreign debt, current account deficit debt and high level of debt from
property and export sectors that would affect the stability of financial
institutions. Moreover, Moody's sees Thailand's coalition government as
ineffective in managing macroeconomic problems and decreases its
international competitiveness.
Dr. Vuthiphong Priebjrivat, president of Thai Rating and
Infromation Services (TRIS), Thailand's credit rating agency, is of the
opinion that Moody's did its duty as a credit rating agency to warn the
investing public in a straightforward manner. Moody's action is a part of
the normal monitoring process called "creditwatch", Dr. Vuthiphong said.
Dr. Vuthiphong said that people should not emotionally react to
Moody's opinion. "Instead", he said, "we should take those comments as a
guide for making improvements especially in building our competitiveness in
international market. To do so, apart from political reform, the
government should reform public administration and educational system
because we have neglected the human resource development for too long."
"Inefficient political and governmental systems are a drain on business",
he continued. "In the past many years, Thailand had been busy with
political squabbles while many of our neighboring countries used those
times to improve their economic and social systems, Dr. Vuthiphong said.
TRIS's president said he is convinced of the benefits of having
ratings from more than one agency. "Two credit rating agencies serve as two
mirrors reflecting two opinions," he said "The government would be wise to
listen to both opinions since neither opinion is right or wrong". Players
in the international market tend to weigh both opinions, using one to
counterbalance the other". TRIS's president said that the major
responsibility of credit rating agencies is with the investing public not
the issures. Even when unsolicited, international rating firms like Moody's
and Standard and Poor's (S&P) would still rate Thailand since there is
investors' interest worldwide on our sovereign and corporate issues. End.
The warning from Moody's Investors Service (Moody's) that it
would review the long-term foreign currency ratings of five Thai banks and
financial institution as well as the Thai sovereign for bonds and deposits
has caused concern that it would affect Thailand's financial system with
higher funding cost. The five banks and financial institutions under review
are the Bangkok Bank, Siam Commercial Bank, Thai Farmers Bank, Export-
Import Bank of Thailand (EXIM) and Industrial Finance Corporation of
Thailand (IFCT), all of which now have A2 ratings.
Moody's concern stems from rapid increases in Thailand's short-
term foreign debt, current account deficit debt and high level of debt from
property and export sectors that would affect the stability of financial
institutions. Moreover, Moody's sees Thailand's coalition government as
ineffective in managing macroeconomic problems and decreases its
international competitiveness.
Dr. Vuthiphong Priebjrivat, president of Thai Rating and
Infromation Services (TRIS), Thailand's credit rating agency, is of the
opinion that Moody's did its duty as a credit rating agency to warn the
investing public in a straightforward manner. Moody's action is a part of
the normal monitoring process called "creditwatch", Dr. Vuthiphong said.
Dr. Vuthiphong said that people should not emotionally react to
Moody's opinion. "Instead", he said, "we should take those comments as a
guide for making improvements especially in building our competitiveness in
international market. To do so, apart from political reform, the
government should reform public administration and educational system
because we have neglected the human resource development for too long."
"Inefficient political and governmental systems are a drain on business",
he continued. "In the past many years, Thailand had been busy with
political squabbles while many of our neighboring countries used those
times to improve their economic and social systems, Dr. Vuthiphong said.
TRIS's president said he is convinced of the benefits of having
ratings from more than one agency. "Two credit rating agencies serve as two
mirrors reflecting two opinions," he said "The government would be wise to
listen to both opinions since neither opinion is right or wrong". Players
in the international market tend to weigh both opinions, using one to
counterbalance the other". TRIS's president said that the major
responsibility of credit rating agencies is with the investing public not
the issures. Even when unsolicited, international rating firms like Moody's
and Standard and Poor's (S&P) would still rate Thailand since there is
investors' interest worldwide on our sovereign and corporate issues. End.