Role of Thailand Politicians Is in Question.

Dec. 7--Is Rerngchai Marakanond a technocrat who overstepped his authority, caused state losses and should now take responsibility under the law?

Or is the former central bank governor an unfortunate scapegoat paying the price for the policy mistakes of his political superiors?

Shortly after Thailand's economy imploded in 1997, the Chuan government appointed the first of what would be several top-level investigative panels to review the policy decisions taken by the central bank.

The investigations focused on three major areas: the failed defence of the baht in the first half of 1997, the handling of the defunct Bangkok Bank of Commerce and the approval of billions of baht in loans to ailing finance companies by the central bank's Financial Institutions Development Fund.

Now four years later, Mr Rerngchai, who served as central bank governor from mid-1996 to July 1997, has been singled out as the only official for possible legal action.

Central bank directors last week unanimously concluded that Mr Rerngchai had been severely negligent in failing to heed calls to change the fixed-rate regime earlier and by approving the defence of the baht without any limits on the use of currency swaps or foreign reserves.

Civil charges for the damages arising out of the baht defence -- assessed by the central bank at 185 billion baht and now being reviewed by prosecutors -- are likely to be filed against Mr Rerngchai shortly.