Secondly, as a developing market, Thai companies typically relied on bank financing rather
than capital market financing to secure funds for growth. Developing capital markets are
often incapable of acting as an effective monitor and disciplining company managers.
Banks, as the main suppliers of corporation finance, should serve a vital monitoring role with
their borrowers. To compound the governance difficulties at individual firms, banks
themselves were suffering from poor governance practices in many cases. In the aftermath
of the crisis, the government shuttered fifty-six finance firms. Several banks closed, either
taken over by the government or merged into larger rivals. Several of the remaining banks
were forced to seek strategic foreign investors to speed their recovery. Again, poor
governance practices played a major role in their difficulties.