Pin Chakkapak, the former head of the finance company blamed for triggering the 1997 financial crisis, insists he acted honestly, and blamed the Bank of Thailand for its failures in stabilising the monetary system and supervising financial institutions.

The former president of the now defunct Finance One spoke out about the central bank's shortcomings in a five-page article written ahead of the 10th anniversary of Thailand's economic meltdown.

He asked why the blame for the collapse of many financial institutions in a short period was placed on the institutions that did not survive, and particularly on the executives running those institutions.

Pin pointed out that in other economies, when all financial institutions run into trouble at the same time, it is recognised that the setbacks are usually due to external factors such as an economic shock, which is a systemic failure.

He insisted that the crisis was not driven by one man, as the government had tried to claim in its years-long battle to extradite him from London, where he has lived in exile since.

"Managers of failed institutions are not automatically prosecuted just because they were managers of a failed financial institution. Not all managers of failed financial institutions are dishonest… In other countries, managers of failed financial institutions can be a sought out commodity as he has the experience not to get it wrong twice," Pin said.

He noted in hindsight that he should have resigned when the market reacted negatively to Finance One's huge capital increase in 1994, knowing that without additional capital, finance companies could not survive the impending crisis.

He said he knew Fin-One, as the company was known, would need large amounts of capital after witnessing the Mexican crisis that caused closures of financial institutions. Fin-One then outlined the strategy to take over Thai Danu Bank "because historically the Bank of Thailand had never closed a bank in previous periods of financial crisis, only finance companies".

He recalled that the central bank had set conditions to make it hard for Fin-One to buy the bank, even though Fin-One's capital base was much larger than the bank's.

"The Bank of Thailand failed to address before the 1997 crisis a recognised flaw in the Thai financial industry structure, the predicament that a significant number of finance companies failed during each of the previous economic slowdowns…. It takes a crisis for the Bank of Thailand to recognise that finance companies should be converted to banks," he wrote.

Pin, who was dubbed the "Takeover King" before the crisis because of several acquisitions that quickly boosted the size of Fin-One, also blamed the central bank for its lack of help when Fin-One witnessed massive deposit withdrawals, even though it was both regulator and lender of last resort. "Instead of assisting Fin-One survive the deposit run as a lender of last resort, the Bank of Thailand certainly facilitated the deposit run that caused Fin-One to fail," he said.

He also lamented the central bank's announcement that Fin-One was weaker than thought, questioning how could the central bank be unaware of the company's actual financial condition when it received reports on a monthly basis.

"The sad reality is the finance company supervision part of the Bank of Thailand was incompetent," he said.

Pin said enactment of the pending Bank of Thailand Act and Currency Act to give greater authority to the central bank would not help, as it would also perpetuate the bank's legacy of implementing compromised policies.

He recalled that throughout his experience, there was an overwhelming impression that the bank's policy options for its primary responsibility of promoting monetary stability were frequently limited by concerns about the impact on the financial institutions. Compromised policies run the risk of not addressing the problem, he said.

 A better solution is to strengthen supervision of financial institutions so that the central bank can focus more on its primary responsibility, he said, adding that this works well in Britain where the Bank of England and the Financial Services Authority separately supervise the monetary system and financial institutions.

He said there is the need to implement changes in the Bank of Thailand, particularly in view of the currency mismanagement that eventually led to intervention by the International Monetary Fund and the baht's devaluation.

While it is the central bank's duty to defend its currency, "to exhaust the reserves in a few weeks must come from misplaced competence or confidence", Pin said.

At the end of the article, Pin wished Thailand luck to not witness another crisis.

"Being at the epicentre of a global-scale financial crisis should be an experience never to be repeated … A Thailand-induced financial crisis should not happen again," he wrote.