were not receiving sufficient information on product risks and stability of service providers, while respondents from every survey group believed that they were not receiving enough financial news and information.
Corresponding with the nationwide survey, the Bank of Thailand also engaged McKinsey & Company to benchmark the Thai financial system with international best practices to determine market-based development options most appropriate for Thailand’s economic profile and modern sector needs. The report analyzed not only international trends, but also used focus groups to gather the opinions of financial experts from local and foreign financial institutions, rural banks, and capital market.
By forecasting the long-term outlook and needs of Thailand’s real economic sector, the report came out with market-based prescriptions that addressed the root causes of financial service deficiencies such as dominance of bank lending, fragmented industry structure, and convoluted supervisory framework that undermined player performance. The resulting recommendations emphasized the need to reform the financial infrastructure specifically the rationalization of the roles and types of financial institutions and implementation of sustainable means to improve access to financial services for the urban and rural retail segment. At the same time, the report also advised on the need for improved consumer protection, credit information services, legal system, and capital market development.
Stage 3: Finalize Vision and Policy Recommendations (January – December 2003)
Based on the above empirical analyses, the Steering Committee finalized three main visions for the Thai financial system, and further identified areas of improvement that would help authorities realize those visions. These areas were later subdivided into core and supporting reform measures. Once the Steering Committee finalized the strategies and action plans, the entire package was submitted to the Minister of Finance for approval.5 Upon giving consent to the draft plan, the Minister of Finance then presented the plan to the Council of Ministers, which formally acknowledged the FSMP in December 2003.
II. FSMP VISIONS
Vision 1: Provide financial services to all potential, economically viable, users whereby users should have access to basic financial products and services at the appropriate pricing.
5 For the purpose of ensuring effective cooperation between financial regulators, it is customary for representatives of relevant supervisory agencies to be present and involved during major policy deliberations. In terms of the FSMP, the advisor of the Minister of Finance (Mr. Chaiyawat Wibulswasdi), Secretary General of Securities and Exchange Commission (Mr. Prasarn Trairatanavorakul), Director General of the Department of Insurance (Ms. Potjanee Thanavaranit), were appointed as directors in the Steering Committee. This mixture of financial regulators was also repeated for the Committee to review application to establish commercial bank in accordance with the Financial Sector Master Plan, whose role will be discussed in further detail in Chapter 3.