the supervisory system of the authorities was adequate. It turned out that most commercial banks and finance companies in Thailand at that time lacked adequate experience or maturity,with poor corporate governance. Financial mismanagement and so-called "crony capitalism" were widespread.Worse yet, the central authorities at that time did not have the capacity to effectively supervise financial institutions. Such deficiency led to widespread imprudent lending by financial institutions and contributed to widespread speculative investment,particularly in real estate project,fueling an asset price bubble.