Thus, these foreign banks tend to gain control of a niche market of
foreigners in terms of nationalities for their businesses. As mentioned in the
overview section, the comparison of size and scale of domestic and overseas
banks in Thailand reveals that domestic banks still maintain the majority of
banking businesses.Thai financial system has gone through different periods. In the early
1990s, starting with financial liberalization, Thailand accepted the International
Monetary Fund’s Articles of Agreement and deregulated some measures in the
financial system3. In 1992, the Stock Exchange Commission was established to
control and supervised the stock exchange market in Thailand. In order to boost
the growth of the Thai economy, in 1993, the Thai government has established the
Bangkok International Banking Facility (BIBF) which is an offshore financial
market. The purpose of BIBF was to facilitate the flow of foreign capital into
Thailand and increase domestic investment need (Collignon, Pisani-Ferry, & Park,
1999). It encouraged local Thai companies borrow a large amount of money from
foreign countries. Since the interest rate was lower than Thai currency, most of
these loans were in US dollars.