Deputy governor Bandid Nijathaworn said losses could top Bt4.5 billion on top of a Bt4.3-billion exposure to financial papers issued by Lehman.
As of July, Thai banks' foreign investments totalled Bt102 billion, only 1.3 per cent of the banking sector's assets.
Even though some banks have had off-balance sheet transactions with Lehman, with a face value of Bt5.3 billion, any potential loss is expected to be less than Bt100 million.
Thai banks have been advised to monitor the situation closely in the next few months to be able to take prompt action. Bandid said it was not clear if all transactions with Lehman and its subsidiaries and affiliates would be subject to asset devaluation. If so, Thai banks would need to set aside additional capital.
Another risk factor lies in capital moving out of the Kingdom, because US banks are mobilising funds. However, Bandid said the Thai banking system was strong enough to withstand the negative impact, with a 15.2-per-cent capital-adequacy ratio and excess liquidity.
"The direct impact is quite limited and does not affect performance and stability of the banking system," he said, declining to name the Thai banks that have exposure to Lehman.
Bandid also believes the Lehman fiasco would not bring about systematic effect as feared, given the Federal Reserve Board's financial window to investment banks. Yet, if the turmoil is prolonged, it could lead to a credit crunch and the global economy could be affected.
He believed that Thai banks would withstand the negative impact, as 70 per cent of their funds are from domestic deposits.
Santi Vilassakdanont, chairman of the Federation of Thai Industries, expected the Lehman collapse to lead to more sell-offs of Thai shares. There has been no impact yet on Thailand's exports, he noted.
"This will definitely hit investment sentiment in Thailand. While the US is injecting money to address the problem, Thailand must also quickly address the political problems to restore investor confidence," Prasert Bunsumpun, president of the Federation of Thai Capital Market Organisations.
In the past 3-4 months, foreign sell-offs have exceeded Bt100 billion while market capitalisation has plunged 20 per cent. Though listed companies showed higher profits and are cheap, foreign investors could remain on the sidelines if political problems persisted.