The Thai authorities have long been aware of the need to deal with distressed financial institutions to avoid financial instability . The Financial Institutions Development Fund was estrablished in November 1985 to provid financial support for the rehabilitation and development of financial institutiions in order to maintain financial stability . From the experience of its operations, particularly during the period leading up to the crisis, the Financial Institutions Development Fund has been accused of trying too much to shore up Ten year After the Financial Crisis in Thailand
Insolvent financial institutions instead of closing them down. This can lead to greater costs to the public in the end. In addition, shoring up financial institutions can lead to moral hazard by induzing financial institutions to undertake businesses that contain excessive risks.