Bankers urge action plan on financial market liberalisation
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The government has no action plan to deal with financial-market liberalisation as Asean moves towards a single market in 2015, threatening the country's competitiveness and the interests of local investors, said bankers and capital-market representatives
The government has not created an equivalent of the Japan External Trade Organisation to help Thai corporations invest abroad, said Kobsak Pootrakul, executive vice president of Bangkok Bank.
Jetro provides information to Japanese investors who want to go abroad, while other countries such as China, Singapore and Malaysia actively help local corporations expand overseas, he said yesterday at a conference hosted by the Senate committee for fiscal, banking and financial institutions.
Large Asean banks such as Malaysia’s CIMB and Singapore’s United Overseas Bank have aggressively moved into Thailand and other countries in the region with support from the their governments, which have stakes in those banks, he said.
Meanwhile Bangkok Bank does business differently. It opens branches abroad largely to serve Thai customers who invest in those countries or Thai workers who work overseas, such as in Taiwan, he said.
“Government policies such as its plan to collect a 0.47-per-cent fee from banks’ deposit base will put a burden on banks, crippling their capacity to compete with Asean banks,” Kobsak said.
Banks will have to pay the fee for 25 years to pay off the Bt1.14-trillion debt of the Financial Institutions Development Fund. That will deprive them of money they could use to expand abroad or upgrade their computer systems, he said.
The FIDF carries debt left over from the massive bail-out of banks hit by the 1997 crisis.
Veerathai Santiprabhob, executive director of the capital market research institute of the Stock Exchange of Thailand, said many laws related to capital markets needed to be amended to facilitate movement of funds in Asean.
“Lawmaking in Thailand is very time-consuming. It takes years to make changes to existing laws or introduce new ones,” said Veerathai, adding that slow responses to new business environments could erode the country’s competitiveness.
Current laws do not support dual listing of Asean firms, he said. If companies listed in other Asean countries could also list on the Thai bourse, it would offer more choices to Thai investors, he argued.
Thai tax law related to share trading does not match international standards, which prevents local firms from raising funds efficiently and makes investment in the capital market difficult, he said.
The SET also needs to be restructured to expand its capacity, he said. The current board structure, half represented by the Securities and Exchange Commission and the other half by securities firms, should be changed.
Singapore, Malaysia and the Philippines have already succeeded in restructuring their bourses, he argued. Former finance ministers supported the change.
The current minister, Kittiratt Na-Ranong, however, recently expressed his opposition to liberalisation of the stock market.
