Economic reform in several sectors and the more stabilized Thai currency will leave a little room for a financial crisis which battered Thailand a decade ago from occurring again, the Bank of Thailand (BoT) governor Tarisa Watanagase said on Friday.

Although a new economic crisis such as that of a decade ago, which resulted from speculation and attacks on the baht, still has possibilities to happen, but Tarisa said it will be very slim because of improvements in the economic structure.

Financial institutions have focused more on quality rather than on collateral before extending credit, as they had learned a lesson from the 1997 financial crisis that the value of land placed as collateral could itself retreat, she said.

Also, financial institutions are now concentrating more on business survival of projects seeking loans, she said, adding that there are small chances of a foreign exchange crisis from occurring now.

"The financial crisis in 1997 erupted because the baht was then fixed (against the U.S. dollar) which was not realistic and did not represent the true picture of our economic fundamental," the BoT chief was quoted by the Thai News Agency as saying.

"Now that the currency exchange system is changed to the float system and the value is changed according to the market mechanism, the BoT only intervenes when the baht is too strong -- as it was late last year," said Tarisa.

Source: Xinhua