Thai banks unaffected by two recent US bank failures

[snoop1130]

 

Thailand’s commercial banks and other financial institutions have not been affected by the recent failures the US’s Silicon Valley Bank and New York-based Signature Bank in the past week, Deputy Government Spokesperson Traisuree Traisoranakul said today (Monday).

 

She disclosed that Prime Minister Prayut Chan-o-cha has, however, ordered the government’s economic team to monitor the situation closely.

 

She said that no Thai commercial banks or financial institutions had invested or engaged in any transactions with the two failed US banks, adding that the impact of the closures on the US economy is limited, because the services of the two banks were limited, unlike ordinary commercial banks, and thanks to swift intervention by the US regulators.

 

According a Bank of Thailand report at the end of last year, all Thai commercial banks’ BIS (Bank for International Settlements or capital to risk asset ratios) amounted to 19.4%, with a liquidity coverage ratio (LCR) at 197.3 and the amount of non-performing loans at 2.73%, whereas the NPL coverage ratio stands at 171.9%. Credit extension and deposits are not concentrated within certain groups, but spread broadly.

 

Full Story: https://www.thaipbsworld.com/thai-banks-unaffected-by-two-recent-us-bank-failures/

 

-- © Copyright Thai PBS 2023-03-13

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

 

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[steven100]

sad really .... I was hoping for collateral damage

[Sharp]

The cards are starting to fall!!!

[Hawaiian]

Words of reassurances are just that.....words.

[connda]

Thai banks unaffected by two recent US bank failures.....

.....until they are.

[ukrules]

4 hours ago, steven100 said:

sad really .... I was hoping for collateral damage

Give it a week or two and review the situation

[liddelljohn]

Thai banksters will stand in front of a Tsunami and say all is fine like in 1997  ha ha

[webfact]

Minimal Impact On Thailand From Collapse Of 2 US Banks
by TNR Staff

 

A worker arrives at the Signature Bank headquarters in New York City on March 12, 2023. Photo: Reuters/Eduardo Munoz and published by CNA

 

FINANCE Minister Arkhom Termpittayapaisith said the collapse of two US banks, Signature and Silicon Valley Bank, has little impact on Thailand as there were no transactions nor investments in them, Matichon newspaper said

.

US regulators closed New York-based Signature Bank on Sunday, the third largest failure in US banking history, two days after authorities shuttered Silicon Valley Bank in a collapse that stranded billions in deposits, a Reuters report published by Yahoo!finance said.

 

The Federal Deposit Insurance Corporation (FDIC) took control of Signature, which had $110.36 billion in assets and $88.59 in deposits at the end of last year, according to New York state’s Department of Financial Services.

 

Full story: https://thainewsroom.com/2023/03/13/minimal-impact-on-thailand-from-collapse-of-2-us-banks/

 

-- © Copyright  THAI NEWSROOM 2023-03-14

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

 

The most versatile and flexible rental investment and holiday home solution in Thailand - click for more information.

[Jingthing]

Any bank anywhere will be in trouble if there is a run on the bank caused by panic, justified or not. In the case of SVB it was justified. 

[CartagenaWarlock]

A married couple can keep upto 2 million US dollar in different types of accounts in one FDIC insured banks. While I am not much concerned about the failures of these two banks but the effects on small businesses/start ups  can be devastating. Their venture funds will disappear and it will be difficult to pay salaries and to vendors. I can see a few startups are already complaining in FB that could not pay salaries to the employees. Hope the Federal government can step in and do something about this. They have not yet found a new buyer. Some are suggesting Fed to take over the bank.  The CEO was also instrumental in weakening Dodd Frank stress tests and liquidity requirements. 

Edited March 13, 2023 by CartagenaWarlock

[Iron Tongue]

Of course no Thai banks were 

8 hours ago, snoop1130 said:

...no Thai commercial banks or financial institutions had invested or engaged in any transactions with the two failed US banks,

Of course not!  

SVB only worked with technology leaders and entrepreneurs.

[spidermike007]

Thai banks are notoriously conservative. Their lending criteria are ridiculously difficult, unlike many US banks. 

 

But, we shall see. The worldwide economy may be in for a rough ride. Major corrections are likely to happen. The economy is still way too over inflated. 

[milesinnz]

"Thailand Private Debt accounted for 164.78 % of its Nominal GDP in Dec 2022"... nah, it will just be a different train wreck...

[IAMHERE]

Well, it will be nice to find that the FDIC monies are really available for their intended use and been 'borrowed' by the Fed already. I'm betting nobody is made 'whole' until Congress agrees to increase the 'never to be paid back' debt limit yet again.

I hope there is a Thai equivalent to FDIC. I've got a bit over 800,000 baht at stake.

 

[hotchilli]

9 hours ago, snoop1130 said:

She disclosed that Prime Minister Prayut Chan-o-cha has, however, ordered the government’s economic team to monitor the situation closely.

Maybe he doesn't want his overseas investments going up in smoke.

[nigelforbes]

21 minutes ago, IAMHERE said:

Well, it will be nice to find that the FDIC monies are really available for their intended use and been 'borrowed' by the Fed already. I'm betting nobody is made 'whole' until Congress agrees to increase the 'never to be paid back' debt limit yet again.

I hope there is a Thai equivalent to FDIC. I've got a bit over 800,000 baht at stake.

 

There is, it's called the DPA

 

https://www.dpa.or.th/en/articles/view/who-is-protected

[nigelforbes]

40 minutes ago, milesinnz said:

"Thailand Private Debt accounted for 164.78 % of its Nominal GDP in Dec 2022"... nah, it will just be a different train wreck...

That's business and consumer debt, not public debt, private debt is not a part of GDP.

Edited March 13, 2023 by nigelforbes

[mania]

10 hours ago, steven100 said:

sad really .... I was hoping for collateral damage

Oh don't worry because if that is how you feel you will be very happy in 2023

Hear me now or...Believe me later Up 2 U ????

 

Edited March 14, 2023 by mania

[DiDiChok]

For me, the word "unaffected" simply does not mean much.  I think that most people know what a "Bank Run" is, so I'll leave you to look into that further if you need to.  This "unaffected" could possibly mean that there are no lines of people queueing to get their money out of a Bank.  However, there is something called a "silent run" that is equally devastating and applies to Thailand.

 

A "silent run" is when depositors reduce their balance in an institution to the guaranteed or insured amount.  You may remember the Thai Government slowly reduced the guarantee for Bank accounts down to ฿1,000,000 per depositor per institution from a much higher level over the last few years.  This guarantee comes into force when a Bank collapses to provide certainty that depositors are refunded up to that amount.  I think Thailand reduced the amount because most have less than ฿50,000 in the Bank as shown by a recent survey.  You may note that SVB covered $US250,000 and the UK covers £85,000.  What depositors do with excess money to keep it safe is answered by how much they have. 

 

If there are enough Banks so that depositors' money can be spread between them to guarantee repayment in full, it's fine for the depositor.  Otherwise, assets must be held outside the banking system in other tradeable ways such as gold, property or art.  If enough money is moved in this way it is the same as a bank run with the same deadly consequences.

 

Remember that nobody will tell you when a "silent run" is taking place but the Banks' risk evaluators will know and will alert the management.  Being prudent, I did "silent runs" in the UK back in 2006 before the big crisis hit there.  When the crisis happened, the UK Government decided to guarantee all deposits and averted catastrophe so my plan wasn't actually needed, but it could well have been.  So "Unaffected" only means keep calm really and you should make of that what you wish.  That's fractional banking for you.

[nigelforbes]

9 minutes ago, DiDiChok said:

For me, the word "unaffected" simply does not mean much.  I think that most people know what a "Bank Run" is, so I'll leave you to look into that further if you need to.  This "unaffected" could possibly mean that there are no lines of people queueing to get their money out of a Bank.  However, there is something called a "silent run" that is equally devastating and applies to Thailand.

 

A "silent run" is when depositors reduce their balance in an institution to the guaranteed or insured amount.  You may remember the Thai Government slowly reduced the guarantee for Bank accounts down to ฿1,000,000 per depositor per institution from a much higher level over the last few years.  This guarantee comes into force when a Bank collapses to provide certainty that depositors are refunded up to that amount.  I think Thailand reduced the amount because most have less than ฿50,000 in the Bank as shown by a recent survey.  You may note that SVB covered $US250,000 and the UK covers £85,000.  What depositors do with excess money to keep it safe is answered by how much they have. 

 

If there are enough Banks so that depositors' money can be spread between them to guarantee repayment in full, it's fine for the depositor.  Otherwise, assets must be held outside the banking system in other tradeable ways such as gold, property or art.  If enough money is moved in this way it is the same as a bank run with the same deadly consequences.

 

Remember that nobody will tell you when a "silent run" is taking place but the Banks' risk evaluators will know and will alert the management.  Being prudent, I did "silent runs" in the UK back in 2006 before the big crisis hit there.  When the crisis happened, the UK Government decided to guarantee all deposits and averted catastrophe so my plan wasn't actually needed, but it could well have been.  So "Unaffected" only means keep calm really and you should make of that what you wish.  That's fractional banking for you.

Thailand's DPA (deposit protection agency) initially set the insured amount very high, as I recall, I believe at 15 million Baht, because it wanted to attract funds and inspire confidence in the banking system. That job done, the levels were reduced many times, over many years, to their present level. On several occasions reductions in the level of insured deposits was postponed. There has not been in any agenda in these reductions other than to bring the level of guarantee, into line with average balances.

[SiSePuede419]

Amazing how many International Banking experts there are here. ????

[nigelforbes]

11 hours ago, steven100 said:

sad really .... I was hoping for collateral damage

You got your wish, USD fell so now you get fewer Baht for your foreign currency, well done!

 

https://finance.yahoo.com/quote/THB%3DX?p=THB%3DX

https://www.marketwatch.com/investing/index/dxy

[4MyEgo]

Time be buying some shares, I'm in.......

[Frankie baby]

I thought that HSBC was about to take over the Silicone Valley bank for the sum of its debts. Or has this been binned because of the Chinese connection?

[PETERTHEEATER]

2 hours ago, hotchilli said:

Maybe he doesn't want his overseas investments going up in smoke.

The overseas investment portfolios of he and his trough-lining sycophants could be in for an unwelcome adjustment this year.

[Tropposurfer]

What a farce. The US banking system is so broken. Second major banking collapse in the last 20 years. I come from a nation that has had ZERO bank catastrophes inits entire history.

Last time with that Fanny May and other banks collapsing because of appalling, unregulated, economically suicidal and corrupt  practices the government bailed out the banks as well. 

[BusyB]

I think the more important question is how many Thai tech startups had their money there? How will the collapse affect them? Biden says depositors will be protected 100%, even those with deposits larger than the $250000 guaranteed protection. Will foreign deposits also be protected? Can they readily access their cash like right now because that's when they need it. Could Thaitechs go to the wall? Never mind the banks. They have not addressed that - it looks like they haven't even thought about it in those terms.

 

The second question is how high Thai bank holdings are in long term bonds whose prices have slumped as a result of interest rate rises, therefore hollowing out the real market value of those holdings. This is a real question which is also not addressed in the BOT statements.

 

It's really interesting when you look back, since the dot.com bust of 2000 (as far back as I go) every time the Fed hikes rates, there's a financial crisis and they have to drag 'em back to rock bottom again. And here we are again. Now the whispers are the Fed may have to 'pause' planned hikes.

 

Could it be the system is no longer fit for purpose as it is? It is clearly unsustainable anyway if the planet is to survive in any inhabitable shape whatsoever for anything other than cockroaches.

 

[BE88]

59 minutes ago, Frankie baby said:

I thought that HSBC was about to take over the Silicone Valley bank for the sum of its debts. Or has this been binned because of the Chinese connection?

No, HSBC bought it for a pound.

I offered two pounds but they said no.

[BE88]

25 minutes ago, BusyB said:

I think the more important question is how many Thai tech startups had their money there? How will the collapse affect them? Biden says depositors will be protected 100%, even those with deposits larger than the $250000 guaranteed protection. Will foreign deposits also be protected? Can they readily access their cash like right now because that's when they need it. Could Thaitechs go to the wall? Never mind the banks. They have not addressed that - it looks like they haven't even thought about it in those terms.

 

The second question is how high Thai bank holdings are in long term bonds whose prices have slumped as a result of interest rate rises, therefore hollowing out the real market value of those holdings. This is a real question which is also not addressed in the BOT statements.

 

It's really interesting when you look back, since the dot.com bust of 2000 (as far back as I go) every time the Fed hikes rates, there's a financial crisis and they have to drag 'em back to rock bottom again. And here we are again. Now the whispers are the Fed may have to 'pause' planned hikes.

 

Could it be the system is no longer fit for purpose as it is? It is clearly unsustainable anyway if the planet is to survive in any inhabitable shape whatsoever for anything other than cockroaches.

 

I don't think the US government cares much about foreign accounts.

The world financial system is based only on trust so lies are part of it, like the BOT.

 

[BusyB]

12 minutes ago, BE88 said:

No, HSBC bought it for a pound.

I offered two pounds but they said no.

555

 

I think HSBC only took the UK holdings. Not the whole bank.