In addition, he will allow the Securities and Exchange Commission (SEC) a free hand to investigate stock manipulation, some cases of which are believed to involve former politicians.

Speaking after briefing senior officials, including Finance Ministry permanent secretary Suparut Kawatkul, on his policies over the coming year, Pridiyathorn promised to bring transparency to the management of off-budget spending.

Further, he said he would solve the financial and management problems of all specialised financial institutions, including the Small and Medium Enterprise Development Bank of Thailand, the Government Savings Bank, the Government Housing Bank, and the Bank for Agriculture and Agricultural Cooperatives.

However, this does not mean the abolition of credit facilities for low-income groups implemented by these state-owned banks. But he has asked executives of the state-owned banks to review the "People's Bank" scheme, which has been criticised as one of the Thaksin government's easy-credit policies.

Pridiyathorn also promised to come up with a solution to the controversial two- and three-digit lottery next week.

Asked whether he will cut corporate income tax to boost investment, he said he would let Suparut and the directors-general of the Revenue, Excise and Customs departments look after the tax structure.

The new finance minister said he would use the fiscal deficit to boost growth, while vowing to keep the budget deficit less than 2 per cent of gross domestic product.

The government plans to meet foreign investors after announcing its policies, and Pridiyathorn is optimistic they will have confidence in the both Thai politics and the economy after the coup is seen to have restored political stability.

Separately, Pridiyathorn said he would give the SEC and the Stock Exchange of Thailand (SET) a free hand to scrutinise stock speculation.

He said that, until now, the regulators had been afraid to probe stock manipulation, including the paths of fund flow, because if they dared to do so they would discover exactly what wrongdoings are taking place.

"I haven't prohibited [any investigations] and will allow them full independence," he told a corporate governance forum, adding that politicians in the interim government will not intervene in such investigations, or in other regulatory matters, and will allow the agencies to freely manage any probes.

Pridiyathron said he aimed to ensure that the SEC was independent from politics, and would take a professional view of the operations of the securities watchdog.

Earlier, former finance minister Thanong Bidaya said laws regarding the SEC would be amended so that the finance minister would no longer be the commission's chairman. Both the SEC and the SET have been criticised for protecting the interests of politicians at the expense of other investors.

The deputy prime minister also discouraged listed companies from paying directors incentives that are bound to future income, such as stock options. In these circumstances they can adopt an approach to project approvals or policy implementation that can affect future revenues, he said, adding that at present, the principles of good governance cover only commercial banks.

He also said the creation of a limited deposit insurance institution was a necessity. Implicit blanket insurance had greatly damaged the Financial Institutions Development Fund, resulting in the loss of taxpayers' funds amounting to Bt1.4 trillion in rescue packages following the 1997 financial crisis.

The drafting of a bill to create the deposit insurance body has been pending ever since the crisis. It will offer limited guarantees for depositors in the case of bank failures.

Pridiyathron said he would proceed with economic reforms by introducing key bills related to the financial sector.

"Generally, good laws will be enacted during [the term of the] interim government, like what happened in the Anand Panyarachun government," Pridiyathorn said.

He undertook to push for further amendments to commercial banking laws, but said that supervision of the banking sector would remain the responsibility of the Bank of Thailand.

Wichit Chaitrong,

Anoma Srisukkasem

The Nation