Financial service sector in Thailand needs to be liberalized

BANGKOK, 25 June 2010 (NNT) – A new study shows liberalization and competition are needed in Thailand’s banking and insurance sectors.

An independent study funded by the European Union (EU) and conducted by a research and consulting company, ECORYS, measured economic and social benefits of financial service sector in Thailand, in particular banking and insurance sub-sectors. The study shows that effective reforms and more competition are needed.

The study suggests that the country should allow greater competition and relaxation of some regulatory frameworks. Limitation on operation licenses and branch restriction in Thai banking sector should be loosened up.

On the insurance sector, the findings show that legal loopholes as well as the rights and obligations of both non-Thai and Thai operators should be improved.

It is also recommended that Thailand adopts the Malaysian and Singaporean laws as benchmarks for its financial sector.

The study’s team leader, Dr. Willem van der Geest, stated that global trade liberalization had been promoted through multilateral negotiations at the World Trade Organization (WTO). Thailand and EU should consider a way to define a beneficial agenda for trade under the EU-Thailand Free Trade Agreement (FTA) by including a chapter on financial services as a part of the FTA.