Kriengsak ChareonwongsakThe government established

Establishing the Thai Asset Management Corporation (TAMC):
Who wins, who loses?

Professor Dr Kriengsak Chareonwongsak
Executive Director, Institute of Future Studies for Development (IFD)
kriengsak@kriengsak.com, http://www.ifd.or.th

 

The government established the Thai Asset Management Corporation (TAMC) in 2001 in order to solve the problem of non-performing loans (NPLs) in the financial institution system. However, even though the NPLs in financial institutions could be reduced drastically, the author argued that the problem itself has not been solved completely because the arrangement was merely to transfer the NPLs from financial institutions to other groups of people.    


The Thai Asset Management Corporation (TAMC) is a mutation of the last government’s Asset Management Corporation (AMC). Its formation comes as the result of many concessions and benefit sharing between private financial institutions and the government. Although the establishment of this institution could bring huge windfalls to Thai and foreign creditors as well as Thai debtors, it would be at the expense of the taxpayers in general.
The government plans to use the TAMC, founded to promote efficient management of non-performing assets and for the minimization of losses, to purchase non-performing loans (NPLs) from both public and private financial institutions. For private banks and private AMCs, transferable NPLs are defined as multiple creditor loans, which are fully provisioned and transferable NPLs pending in court.