Finance One’s 1997 collapse is widely associated with the start of Thailand’s Asian financial crisis.
Finance One was Thailand’s largest finance company before authorities suspended its operations in May 1997. Its failure exposed weaknesses in Thailand’s finance sector, including heavy borrowing, property speculation, and rising nonperforming loans. Confidence deteriorated further as investors questioned the country’s fixed exchange-rate policy and the ability of financial companies to repay foreign-currency obligations.
Thailand eventually abandoned its baht peg on July 2, 1997, allowing the currency to float. The baht then fell sharply, and financial stress spread to Indonesia, South Korea, and other economies. The crisis involved currency devaluations, corporate debt, bank failures, and stock-market declines rather than a single exchange-trading event.
Finance One is sometimes confused with the Bank of Thailand, the central bank that managed the exchange-rate response. It is also distinct from Barings Bank, whose 1995 collapse resulted from unauthorized derivatives trading by Nick Leeson.