BOT assures limited impact from Lehman collapse

By The Nation

United States' No. 4 investment bank Lehman Brothers' plan to file bankruptcy would have a limited impact on Thai banks, given the small size of business between Thai banks and the US investment bank, according to Bank of Thailand.

Deputy Governor Bandid Nijathaworn said the central bank's inspection found that 14 Thai banks' exposure to financial papers issued by Lehman is valued at Bt4.3 billion. As of July, Thai banks' overseas investment totalled Bt102 billion, or only 1.3 per cent of the banking sector's assets.

He said the value is small and could not affect the Thai banking sector's stability. So far, about 70 per cent of bank loans has come from domestic deposits and the banking sector's capital fund is as high as 12 per cent of risk assets.

However, the composite banking sector index lost 7.60 points or 3.19 per cent on Monday. The Stock Exchange of Thailand Index also shed 11.95 points or 1.83 per cent to 642.39 points, on thin turnover of only Bt.7.45 billion.

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BOT assures limited impact from Lehman collapse

United States' No. 4 investment bank Lehman Brothers' plan to file bankruptcy would have a limited impact on Thai banks, given the small size of business between Thai banks and the US investment bank, according to Bank of Thailand.

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