Bank of Thailand Debt Moratorium Scheme Ended

[Banana7]

17 hours ago, sanuk711 said:

It seems that you can not go on to T.V. now, without some-(expert)-one handing out the fear pills.

 

If in doubt go onto to Google and ask if Thailand is worse of now then the 1997 crash......NOT EVEN CLOSE....

I was here for that and the BKK Bank etc didn't collapse or take one baht of mine or everyone's money then.

Professional asset managers/money lenders like BAM are deeply concerned and are saying it is worse than the 1997 crash/crisis. See here:

 

[Leaver]

6 hours ago, Brunolem said:

You have to trust the government if your account is in one of the government banks.

 

Private banks have nothing to do with the government.

 

Their superior authority is the central bank.

Do you think the Thai government would honour the deposit guarantee? 

 

Do you think the Thai government would bail out a Thai bank, or allow a bail in, or they would just let it go broke with account holders losing everything?  

[sanuk711]

8 minutes ago, Banana7 said:

Professional asset managers/money lenders like BAM are deeply concerned

There is nothing more asset managers and money lenders like then talking down Banks.......your not safe in banks, where should you put your money? Well how about with us.

[Leaver]

5 hours ago, Kwasaki said:

It's still scaremonger thread and absolute nonsense.

Even OP rabbiting on about money borrowed and not being paid back.

Last I heard is that money borrowed still has to have securities from the borrower or you don't get it.  

Example:

 

So, in the good times, an employed Thai buys a house with finance from a Thai bank.  For the purpose of example, let's just say the house was worth 1 million baht, and the Thai person borrowed 1 million baht.  

 

The new Thai owner works and makes monthly repayments.  Once again for example, say they paid off 100k baht of the loan over the last few years and still owe 900k to the bank.  The property is still worth around 1 million baht.

 

Covid hits.

 

The Thai owner loses their job.  Maybe they worked in the tourism industry, or the hospitality industry, maybe in the agriculture sector, but they are out of work, or had their hours cut, or their salary cut. 

 

Given tourism is around 17% of Thailand's GDP, it's a big employer, not to mention those employed "off the books."  Eg. the sex trade.  

 

They survive initially on their savings, if any, then sell their gold to survive, maybe sell their laptop or other items.  They may try to borrow from family to stay afloat.

 

Covid persists.

 

They have now exhausted their resources and fail to may a house payment.  Correspondence now starts between them and the bank.  Usually of a threatening nature, failure to pay will result in repossession etc.

 

So, they decide to sell the house, and maybe get back the 100k they paid off the loan, the trouble is, hundreds of thousands of Thai's, all over the country, are doing the same. 

 

They list at 1 million, no bites.  They list at 950k, no bites.  They list at 900k, which is break even for them, no bites.  

 

Advertising at less then 900k means they still owe the bank, and have to pay rent somewhere, so they stay in the house until foreclosure, then it becomes the bank's problem, and their credit rating is ruined.  

 

So the Thai bank repossesses. They advertise at 800k for a quick sale and write off a 100k loss, no bites.  They try 700k, no bites.  They try 600k, no bites. 

 

It's now evident to the Thai bank that without a sale, they are going to lose 900k baht, and have tax and fees on the property to pay, so the house goes from being a money maker, to a loss that continues to cost.  

 

Now picture these loses all across Thailand, for all Thai banks, from everything to property, to cars, to motorbikes, to credit cards.

 

So, what has this got to do with farang here? 

 

Well, that 800k you keep in a Thai bank for your visa next year was given to people like the above who have since defaulted.  That's means, no monthly return on the loan, and an asset that can't be sold, even at a substantial loss.

 

So now, the Thai bank, is taking on some heavy loses, and maybe slowly going broke, and they still have charge of your money.  

 

The above is not scaremongering.  It's a very basic example of a Thai bank's exposure.  I haven't even touched on what investments the Thai bank has made that may have seen some further heavy losses due to Covid.  Perhaps they invested in an international hotel group, for example.  

 

As I have said, and others, maybe best to take your money out of the Thai bank while you are still able to, because once everyone else thinks to do the same thing, there will be "a run on the bank" and they may freeze your funds, or have withdrawal limits while they slowly go broke.   

[Brunolem]

1 hour ago, Leaver said:

Do you think the Thai government would honour the deposit guarantee? 

 

Do you think the Thai government would bail out a Thai bank, or allow a bail in, or they would just let it go broke with account holders losing everything?  

The Thai government will not bail out any bank, this is the job of the central bank. 

 

Now, which major bank, worldwide, has been left to collapse during, say the last 10 years? 

 

None that I know off. 

 

When small banks are about to fail, as it has happened a few times in China, for example, a deal is arranged with bigger banks to take them over. 

 

The Thai government, and especially the business leaders standing behind it, are not crazy. 

 

Letting banks fail would lead to mayhem, inside and outside the country. 

 

It is far easier to plug the holes with money created at will by the central bank. 

 

Deutsche Bank, which is maybe the worst in the world in terms of its financial situation, is still standing. 

 

Thailand is not alone being swamped with NPLs, thanks to the covid crisis...all the countries and their banks are in the same boat. 

[Leaver]

22 minutes ago, Brunolem said:

The Thai government will not bail out any bank, this is the job of the central bank. 

 

Now, which major bank, worldwide, has been left to collapse during, say the last 10 years? 

 

None that I know off. 

 

When small banks are about to fail, as it has happened a few times in China, for example, a deal is arranged with bigger banks to take them over. 

 

The Thai government, and especially the business leaders standing behind it, are not crazy. 

 

Letting banks fail would lead to mayhem, inside and outside the country. 

 

It is far easier to plug the holes with money created at will by the central bank. 

 

Deutsche Bank, which is maybe the worst in the world in terms of its financial situation, is still standing. 

 

Thailand is not alone being swamped with NPLs, thanks to the covid crisis...all the countries and their banks are in the same boat. 

We are living in uncertain times.  I agree, nowhere will be completely safe from the fallout.

 

However, I see my bank in my home country as being safer than a Thai bank.

 

It's as simple as that.  

 

Edited October 17, 2020 by Leaver

[Brunolem]

43 minutes ago, Leaver said:

Example:

 

So, in the good times, an employed Thai buys a house with finance from a Thai bank.  For the purpose of example, let's just say the house was worth 1 million baht, and the Thai person borrowed 1 million baht.  

 

The new Thai owner works and makes monthly repayments.  Once again for example, say they paid off 100k baht of the loan over the last few years and still owe 900k to the bank.  The property is still worth around 1 million baht.

 

Covid hits.

 

The Thai owner loses their job.  Maybe they worked in the tourism industry, or the hospitality industry, maybe in the agriculture sector, but they are out of work, or had their hours cut, or their salary cut. 

 

Given tourism is around 17% of Thailand's GDP, it's a big employer, not to mention those employed "off the books."  Eg. the sex trade.  

 

They survive initially on their savings, if any, then sell their gold to survive, maybe sell their laptop or other items.  They may try to borrow from family to stay afloat.

 

Covid persists.

 

They have now exhausted their resources and fail to may a house payment.  Correspondence now starts between them and the bank.  Usually of a threatening nature, failure to pay will result in repossession etc.

 

So, they decide to sell the house, and maybe get back the 100k they paid off the loan, the trouble is, hundreds of thousands of Thai's, all over the country, are doing the same. 

 

They list at 1 million, no bites.  They list at 950k, no bites.  They list at 900k, which is break even for them, no bites.  

 

Advertising at less then 900k means they still owe the bank, and have to pay rent somewhere, so they stay in the house until foreclosure, then it becomes the bank's problem, and their credit rating is ruined.  

 

So the Thai bank repossesses. They advertise at 800k for a quick sale and write off a 100k loss, no bites.  They try 700k, no bites.  They try 600k, no bites. 

 

It's now evident to the Thai bank that without a sale, they are going to lose 900k baht, and have tax and fees on the property to pay, so the house goes from being a money maker, to a loss that continues to cost.  

 

Now picture these loses all across Thailand, for all Thai banks, from everything to property, to cars, to motorbikes, to credit cards.

 

So, what has this got to do with farang here? 

 

Well, that 800k you keep in a Thai bank for your visa next year was given to people like the above who have since defaulted.  That's means, no monthly return on the loan, and an asset that can't be sold, even at a substantial loss.

 

So now, the Thai bank, is taking on some heavy loses, and maybe slowly going broke, and they still have charge of your money.  

 

The above is not scaremongering.  It's a very basic example of a Thai bank's exposure.  I haven't even touched on what investments the Thai bank has made that may have seen some further heavy losses due to Covid.  Perhaps they invested in an international hotel group, for example.  

 

As I have said, and others, maybe best to take your money out of the Thai bank while you are still able to, because once everyone else thinks to do the same thing, there will be "a run on the bank" and they may freeze your funds, or have withdrawal limits while they slowly go broke.   

It doesn't work like that. 

 

The banks don't repossess, like used car dealers do. 

 

What matters most to them is that at least the interests are paid, because this is what goes into their P&L account. 

 

The loan itself remains in the balance sheet, good or not...they pretend it's good. 

 

If necessary, they will reschedule the payments of the principal in order to accomodate the borrower. 

 

The village where I live is full of households heavily in debt, who can't pay back the principal... this was the case long before covid. 

 

Yet there are no repossessions of anything, just negociations. 

 

Every 2 or 3 years, for some loans, the banks pretend to get paid back. 

 

The villagers borrow here and there, for one day, enough money to pay back their loan. 

 

The bank collects the money and immediately issues a new loan, of the same amount...then the villagers give back the money they just borrowed the day before... 

 

[Leaver]

17 minutes ago, Brunolem said:

The banks don't repossess, like used car dealers do. 

 

If that's the case, everyone would buy a house, make only one repayment, and continue to live in it.  ????

 

17 minutes ago, Brunolem said:

If necessary, they will reschedule the payments of the principal in order to accomodate the borrower. 

How does a bank refinance a borrower who has no job, thus no income?

 

The bank is not in the business of providing public housing.

 

17 minutes ago, Brunolem said:

The village where I live is full of households heavily in debt, who can't pay back the principal... this was the case long before covid. 

Just further adding to the ticking time bomb here.

 

17 minutes ago, Brunolem said:

Every 2 or 3 years, for some loans, the banks pretend to get paid back. 

 

Sound like good fiscal policy.  I should buy some shares in a Thai bank.   Maybe I can pretend to get a dividend.  ????

 

 

 

Edited October 17, 2020 by Leaver

[sanuk711]

1 minute ago, Leaver said:

however, I see my bank in my home country as being safer than a Thai bank.

What you see and what is reality, maybe a mile apart leaver.. I have seen banks fail in your (my) country. I have not seen a Thai owned bank fail, you had to live through 97 to realize just how bad it was here. So much worse then the crises of today, however much people try to hand out the fear pills and tell you the end is nigh .

That Thailand should come out of 97 to become as strong as it is---quite remarkable. Try to realize that the BKK Bank is not a village affair, it is operating in 13 different countries with 26 foreign branches.

Two major British banks almost failed in 2008, says central banker

TWO BRITISH banks got within hours of a liquidity shortfall on October 6th and 7th last year as the British financial system came to the brink of collapse, according to Bank of England governor Mervyn King. https://www.irishtimes.com/business/two-major-british-banks-almost-failed-in-2008-says-central-banker-1.744875

 

2007 Brits queuing up outside their bank Northern rock before it collapsed 2007

[Brunolem]

30 minutes ago, Leaver said:

If that's the case, everyone would buy a house, make only one repayment, and continue to live in it.  ????

 

How does a bank refinance a borrower who has no job, thus no income?

 

The bank is not in the business of providing public housing.

 

Just further adding to the ticking time bomb here.

 

Sound like good fiscal policy.  I should buy some shares in a Thai bank.   Maybe I can pretend to get a dividend.  ????

 

 

 

You make simplistic assumptions.

 

The banks are not stupid, they don't lend way above the means of the borrowers.

 

And it is not only in Thailand that things work this way.

 

Banks are "encouraged" to lend by the authorities, with the latter's implicit backing.

 

The whole world economy works on credit, always more of it.

 

If credit stops, the economy instantly collapses.

 

It certainly is not good, but it is like that...

[Leaver]

8 minutes ago, sanuk711 said:

I have not seen a Thai owned bank fail, you had to live through 97 to realize just how bad it was here. So much worse then the crises of today,

Thailand is nowhere near the height of the Covid crisis, financially.  

 

The photo in your post shows people queuing to get their money.

 

Here in Pattaya, I have seen similar queues, but for food.  What does that tell you?  

[Leaver]

9 minutes ago, Brunolem said:

The whole world economy works on credit, always more of it.

And credit only works when it's repaid.  

 

If the repayments stops, the economy can collapse also.  

[Brunolem]

12 minutes ago, Leaver said:

And credit only works when it's repaid.  

 

If the repayments stops, the economy can collapse also.  

Not so.

 

Most of the credit is never repaid, starting with the largest by far, the national debt.

 

More credit/debt is simply piled on to keep the engine running.

 

Obviously this is unsustainable, which is why more and more informed people are preparing for the coming problems, which won't be limited to Thailand.

 

There are many banks, but in fact they all rely on each other within a single system.

 

One major bank failure could collapse the whole system (Bear Sterns in 2008), which is why it is the system itself that will probably collapse, or will be fundamentally reformed (see the Great Reset by the World Economic Forum) in the not too distant future.

[Susco]

1 hour ago, Brunolem said:

The Thai government, and especially the business leaders standing behind it, are not crazy. 

 

Letting banks fail would lead to mayhem, inside and outside the country.

 

43 minutes ago, Brunolem said:

The whole world economy works on credit, always more of it.

 

If credit stops, the economy instantly collapses.

 

1 hour ago, Brunolem said:

Now, which major bank, worldwide, has been left to collapse during, say the last 10 years? 

 

12 minutes ago, Brunolem said:

One major bank failure could collapse the whole system (Bear Sterns in 2008), which is why it is the system itself that will probably collapse, or will be fundamentally reformed (see the Great Reset by the World Economic Forum) in the not too distant future.

 

looks like you are contradicting yourself with each post.

 

It went from they will not let banks collapse, to the collapse of the whole system is inevitable.

[Leaver]

12 minutes ago, Brunolem said:

Obviously this is unsustainable, which is why more and more informed people are preparing for the coming problems, which won't be limited to Thailand.

 

So, you agree, Thailand will have problems.

 

13 minutes ago, Brunolem said:

One major bank failure could collapse the whole system (Bear Sterns in 2008),

It could also be the failure of a smaller bank, that a larger bank has a stake in.  It could be enough to tip the bigger bank over the edge.  

 

As you suggest, if one domino falls, many more could fall also.  

 

Interesting times ahead.

[Brunolem]

4 minutes ago, Leaver said:

So, you agree, Thailand will have problems.

 

It could also be the failure of a smaller bank, that a larger bank has a stake in.  It could be enough to tip the bigger bank over the edge.  

 

As you suggest, if one domino falls, many more could fall also.  

 

Interesting times ahead.

Of course Thailand will have problems, it already has problems...but don't expect to find safe harbor in the US, the UK or the EU...everybody is on the same boat and there is no safe harbor.

 

A small bank will not crash the system, it will be absorbed by the bigger ones, as has happened recently in China.

 

Keep in mind that a central bank has unlimited funds and can always save any bank if necessary.

 

It is mostly an issue of trust...the whole monetary system relies on trust, which must be preserved at all costs.

 

Letting a big bank fail would do no good for trust.

 

The problem lies in the side effects of too much credit/debt.

 

It leads to less and less economic growth and a collapse of interest rates, which in turn incites the financial institutions and the people to take more and more risk, until an accident happens...

[Leaver]

On 10/17/2020 at 6:56 PM, Brunolem said:

Of course Thailand will have problems, it already has problems...but don't expect to find safe harbor in the US, the UK or the EU...everybody is on the same boat and there is no safe harbor.

My bank in my home country is in a better position to navigate unchartered and rough waters than a Thai bank.

 

On 10/17/2020 at 6:56 PM, Brunolem said:

A small bank will not crash the system, it will be absorbed by the bigger ones,

Read again. 

 

If a bigger bank already has  large stake in a smaller bank, and that smaller bank fails, it may be enough to tip the bigger bank over the edge.

 

On 10/17/2020 at 6:56 PM, Brunolem said:

It is mostly an issue of trust...the whole monetary system relies on trust, which must be preserved at all costs.

 

Thailand has a military government, and farang have no rights here.

 

I will trust my own government, and the bank in my home country.

 

 

Edited October 18, 2020 by Leaver

[Leaver]

On 10/17/2020 at 6:56 PM, Brunolem said:

It leads to less and less economic growth and a collapse of interest rates, which in turn incites the financial institutions and the people to take more and more risk, until an accident happens...

Thai banks were already in this position, pre Covid.  

[Brunolem]

28 minutes ago, Leaver said:

My bank in my home country is in a better position to navigate unchartered and rough waters than a Thai bank.

 

Have you studied the balance sheets of these banks?

[Brunolem]

27 minutes ago, Leaver said:

Thai banks were already in this position, pre Covid.  

My post was not related to banks, but to the economy at large.

 

The EU, for example, has had negative interest rates (NIRP) for many years, while until the covid crisis, Thailand interest rate was still at 1.5%...not much but far better than below zero.

 

Negative interest rates harm the banks, which partly explains why the European banks are in such bad shape.

 

As for the risks taken, have a look at the banks' exposition to financial derivatives (financial weapons of mass destruction, according to Warren Buffett)...

[Leaver]

7 minutes ago, Brunolem said:

Have you studied the balance sheets of these banks?

No, but I am a citizen on my home country, that will uphold the rule of law, and I have rights there. In Thailand, I am just a 1 year tourists, and a "'dirty farang."   

 

Thailand can kick me out whenever they want, that's fine, but they don't get to kick me out of their country and keep my money.  

[Leaver]

5 minutes ago, Brunolem said:

My post was not related to banks, but to the economy at large.

 

The EU, for example, has had negative interest rates (NIRP) for many years, while until the covid crisis, Thailand interest rate was still at 1.5%...not much but far better than below zero.

 

Negative interest rates harm the banks, which partly explains why the European banks are in such bad shape.

 

As for the risks taken, have a look at the banks' exposition to financial derivatives (financial weapons of mass destruction, according to Warren Buffett)...

Thailand is a 3rd World Country, and the Thai banking system reflects this.  

 

2021, and beyond, will be interesting for the Thai economy, and Thai banks.  

[NCC1701A]

On 10/16/2020 at 9:39 PM, Leaver said:

So, you have confidence in Bangkok Bank based on how they handled a crash 23 years ago.   

 

Do you have the same confidence in the current Thai government as you did in the Thai government that was in power 23 years ago?   

things are totally different now and far better than 1997. 

 

Thailand swore they would never let a Farang crash their currency again and they have taken every step to make sure it never happens again.

 

 

[Leaver]

6 minutes ago, NCC1701A said:

things are totally different now and far better than 1997. 

 

There's thousands of young Thai protestors at the moment that don't seem to think things are better here now than in 1997.    

[NCC1701A]

3 minutes ago, Leaver said:

There's thousands of young Thai protestors at the moment that don't seem to think things are better here now than in 1997.    

that is not what this topic is about. i am talking about banks.

[Leaver]

4 minutes ago, NCC1701A said:

that is not what this topic is about. i am talking about banks.

Isn't the local Thai economy related to Thai banks?

 

We all know, Money Number One here.  If these young Thai's were prospering, I'm sure they wouldn't be protesting.  

[robblok]

On 10/17/2020 at 3:15 PM, Leaver said:

Do you think the Thai government would honour the deposit guarantee? 

 

Do you think the Thai government would bail out a Thai bank, or allow a bail in, or they would just let it go broke with account holders losing everything?  

They guaranteed the deposit and yes I trust that 100%. Thai or not they did not default on private money within the limits 1997 so the wont now either.

 

 

Lets have a bet 

@Leaver

@Banana7

 

Let put  years time frame here. I say that the guaranteed amounts will always be paid back even if a bank goes under.

 

If I win you guys stop posting those sky is falling stories and find a new hobby. If it fails ill be stopping possitive and be like you guys putting Thailand down at every turn ?

[Brunolem]

12 hours ago, Leaver said:

Thailand is a 3rd World Country, and the Thai banking system reflects this.  

 

2021, and beyond, will be interesting for the Thai economy, and Thai banks.  

What facts do you have about the Thai banks?

 

Once again, have you studied, or even given a cursory look at their balance sheets?

 

Because in the end it is the only thing that matters, not the Thai government or the protesters or the baht exchange rate.

 

There are dozens of countries that are in far worse shape than Thailand.

 

Have you heard about banks going under in Africa, in South America (Argentina is in perpetual financial crisis, not to mention Venezuela), in the Middle East (Irak, Iran, Libya, Syria...)?

 

What makes you think that Thailand is in worse financial shape than these places?

 

And even in lowly and poor Laos and Cambodia, banks are not collapsing one after the other.

 

It is much better to act, or react, on the basis of facts, rather than emotions like many do here...

[robblok]

10 minutes ago, Brunolem said:

What facts do you have about the Thai banks?

 

Once again, have you studied, or even given a cursory look at their balance sheets?

 

Because in the end it is the only thing that matters, not the Thai government or the protesters or the baht exchange rate.

 

There are dozens of countries that are in far worse shape than Thailand.

 

Have you heard about banks going under in Africa, in South America (Argentina is in perpetual financial crisis, not to mention Venezuela), in the Middle East (Irak, Iran, Libya, Syria...)?

 

What makes you think that Thailand is in worse financial shape than these places?

 

And even in lowly and poor Laos and Cambodia, banks are not collapsing one after the other.

 

It is much better to act, or react, on the basis of facts, rather than emotions like many do here...

Its not even emotions its wishful thinking that Thailand will crash and the baht will fall. Expats have been predicting this ever since their own currency went down. Sure I want back to the good old days. Only i let logic and facts rule not my dream of having 30-40% more income.

[Barnabe]

I think it's unfair to call Thailand third world, I think it's more "second world" - their government finances are balanced, the % of people in poverty is low, medical standards are high, no-one is starving (quite the contrary, a lot more fatties around), credit is widely available, telecoms are cheap and fast, the standard of business is OK.

 

If Singapore is first world, Malaysia and Thailand are second world, Vietnam is borderline third world, Cambodia and Laos definitely are third world.