Nevertheless, strategic defaulters remain a problem. Additional challenges for Thailand include the need to speed up the resolution of NPLs, to further improve corporate governance, and to continue the bank recapitalization process. The government's pre-emptive approach to tackling the crisis also limited the damage of the crisis. An institutional framework comprised of Danaharta, Danamodal and the Corporate Debt Restructuring Committee was quickly put into place with the purpose of removing non-performing loans from the banking system, recapitalizing the weaker financial institutions, and facilitating distressed debt workouts. This framework has been successful in restoring financial sector stability.
Significant challenges remain, nevertheless.
A large number of NPLs still need to be resolved and consolidation of the financial sector is required. Given the success of the government's program to date, barring renewed external shocks, there is cause for optimism that these remaining issues will be appropriately addressed.