Abstract

Thai banking’s readiness before approaching a new phase of regional economic integration under AEC’s Financial Liberalization in 2020 is evaluated through the applications of Financial Development Index (FDI), developed by World Economic Forum (WEF). The paper assesses bank’s readiness for regional competition by using readiness index constructed in this study. Data limitation allows this article to cover only six countries in ASEAN, namely, Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. The analysis includes four pillars and one sub-pillar out of 7 pillars representing the whole financial system. Results show that Singapore’s banking system is the readiest country for regional competition, followed by Malaysia, Thailand and Philippines. The banking sector in Thailand is not quite ready for AEC financial liberalization. The pillars that weaken Thai banking system are the “Institutional environment” and the “Business environment”. The country needs to improve these two pillars to foster its competency for AEC challenges.

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