| Summary: | 碩士 === 銘傳大學 === 國際事務研究所碩士班 === 95 === The 1980s have been critical periods for Thailand’s development with its global financial for financial liberalization. In this regard, Thailand received very large and sustained inflows of foreign capital, during 1990-96 which management of the economy during this period of rapid structural change and large capital flows started in 1988 was a major challenge for the Thai authorities.
In order to attain economic growth and development, the authorities faced two policy among the other and institutional challenges during the period 1990-96. First, to avoid economic overheating in the face of massive capital inflows and growing financial integration that reduced the effectiveness of policy. Second, to reduce the vulnerability of the financial sector to domestic and external shocks while liberalizing the sector and opening up to potentially volatile capital flows.This thesis is to explore the policy of the Thai authorities during 1980s, in particular to the financial sector in the context of liberalization and relation of the Government’s policy and Financial Crisis in the effects of capital flow role bringing about the Thai financial crisis. Moreover, source materials are based on the case study of Thai Government’s policy and financial crisis in July 1997.
The thesis concludes that Thai crisis was caused by government policy on Liberalization starting with weak initial conditions (in particular in the financial sector), and not accompanied by a strengthening of the institutional and regulatory framework, led to a rapid build-up of fragility in both the financial and corporate sectors. Coupled with a deficient policy, this process of liberalization led to a rapid build-up of financial maturity mismatches that rendered Thailand vulnerable to a reversal in capital flows and culminated in the crisis in 1997.
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