This paper shows that the global crisis had a late effect on Thai banks as
the TFP only dropped in 2010. While the local banks maintained their stability,
foreign banks were more fluctuating – some improved their TFPs, some did not
and become worst performers in the system. The reason behind it may relate to the
fact that Thai banking system is starting to fall into decreasing returns to scale
situation, which proposes that productivity of Thai banks are expected to
continuously dropping in the next few years. Continuing to develop and
restructuring the banking system, therefore, is an emergence task for Thailand in
the near future.