He's brash, outspoken and aristocratic. Bank of Thailand governor Chatu Mongol Sonakul has played a critical role in leading his country out of Asia's economic crisis. He makes no apologies for being confrontational as he cleans up the scandal-plagued bank and battles for its independence. In doing so, he has clashed frequently with Finance Minister Tarrin Nimmanahaeminda, who is also interviewed by TIME The bank governor spoke with TIME reporter Robert Horn about his goals and tactics, and his future. "Maybe I'll go to Singapore and throw chewing gum wrappers on the pavement just to show it can be done," he says. Excerpts from the interview:
TIME: How important is it to make the central bank independent?
Chatu: The collapse came from here [the bank]. This was the crucial part which failed to hold up, so no doubt about it, the keystone of the New Economy must be the Bank of Thailand. Without this place being re-engineered and being strong, there could be another collapse. This underpins the whole thing.
TIME: Why has there been so much friction lately between you and Finance Minister Tarrin Nimmanahaeminda?
Chatu Mongol: Two or three years after an economic collapse is an interesting time. When you are rescuing things, everyone can agree on remedies quite easily. When you're putting out a fire, you don't have to be very careful: you get a bucket of water and throw it on the fire. Now comes the time to rebuild and some people want to build more and some people want to build less.
TIME: Why was the central bank so quiet when the Minister of Finance needed information on the level of nonperforming loans at Krung Thai Bank?
Chatu: Basically, we cannot be seen to be working hand in hand with the government. We're supposed to be independent.
TIME: Controversy also arose when the finance ministry asked you to report on the whereabouts of the money from the Thai Help Thai campaign that was donated to the government. Why didn't you answer?
Chatu: We had difficulties again, doing what people tell us, basically. We're trying to be independent. The other problem was our understanding that the gold conformed to bullion. But since it was not bullion, as it turned out, there was some difficulty in determining what it was and where it was.
TIME: Did the central bank have trouble finding the information on Krung Thai Bank?
Chatu: Yes. There was no database on Krung Thai Bank. There actually was no database on financial institutions. People do not realize that the Bank of Thailand wasn't auditing financial institutions for four or five years because it just assumed they were good or something. All information at the central bank at that time was on individuals. So I changed that: now every financial institution must be on-site audited once a year. But it still hasn't worked. We've also put up a training school and certification process so there is a standardized approach.
TIME: In your recent speech at the Merrill Lynch Investor's Conference in London, you said the "powers that be have taken a reactionary stance" when it comes to central bank independence. Who did you mean by the "powers that be?"
Chatu: If I meant someone that I could name then I wouldn't say the "powers that be" (laughs). Actually, there are a split of opinions. Either the Bank of Thailand will be independent inside the government or independent from the government. Every country has the same problem--that when push comes to shove, the government is going to have to provide the money. So the relationship should be a cooperative and cordial one.
TIME: Has it been cooperative and cordial?
Chatu: Well, we're in very difficult times and nobody sees eye to eye on anything. Basically, it's very difficult.
TIME: But can you be more specific about what reactionary measures these "powers that be" have taken?
Chatu: Nope. I was as specific as I wanted to be at the time. It was done with a purpose. If everything was going fine, I would have said everything was going fine. It was done to highlight issues, which I think it has done, and things are changing.
TIME: You said in your London speech that you were deliberately creating controversies. Why?
Chatu: I did. I'm just trying to get the issues addressed instead of things being decided by one group or person without being discussed. These issues should be discussed because it's important to the country.
TIME: In creating controversies, however, obviously some people's feelings get bruised.
Chatu: Probably mine (laughs).
TIME: Although there might be differences of opinion over the independence of the central bank, some of the people who have been upset are essentially your allies. By getting them upset, are you risking turning your allies against you?
Chatu: No. I don't think they're my allies (laughs). I practically have no allies.