On August 23, the Bank of Thailand BoT amended its bank capital guidelines, giving domestic banks greater flexibility in being able to meet year end capital adequacy ratios of 8.5%. A new category of capital, upper tier 2 debt, was allowed for the first time, in order to enable the sector to boost weakened capital bases. Previously, although tier 2 debt could theoretically equal tier 1 debt, only lower tier 2 debt was allowed. Since this could not exceed more than 50% of tier 1 debt, the 100% figure was fairly meaningless.
However, while BoT officials have confidently stated that up to Bt160 billion $3.9 billion might...
