Thailand had learned its lessons from the Asian crisis which began in July last year and "probably its banking system will recover way before the others," he told a banking conference in Singapore.

Dalhaise told reporters later Thomson Bankwatch had divided Asian banks into "the good, the bad and the ugly" and several of Thailand's banks fell into the "bad" category, meaning they could be saved despite the crisis.

"In the good, you put the banks that have suffered but they will come out of it given time," he said. These included banks in Singapore, Hong Kong and the Philippines, he said.

``The bad ones have lost so much, in fact, that they have reached a point where according to theory, they are'', he said.

"The difference between the bad and the ugly is that it is still conceptually possible for the bad ones to berehabilitated."

Of Thailand's 15 banks "at least nine of them will be okay" and their rehabilitation did not necessarily need huge capital injections, he said.

Another option would be to leave these banks to function with negative capital ratios until the crises was over because they would probably be able to generate their own cash flows eventually.

Delhaise said he was less sanguine about the prospects for the 200 commercial banks in Indonesia, where he thought about 60 were likely to pull out of the crisis intact. In the ugly category, beyond repair, so they should be nationalised.

These banks should be absorbed into government concerns rather than be liquidated, a process which would be costly to the country, he said.

"Indonesia will come out of the crisis with a banking system that is re-nationalised, " he said.

Dalhaise said banks in Japan and South Korea were in dire straits because they were inefficiently structured and did not have sufficient cash-generating capacity to overcome hugeoverheads.

"The major problem with them has to do with the efficiency of the banking systems," he said. "Until and unless you solve that problem, there is no other way out," he said.

Dalhaise said Malaysia had banking problems because there was no "watertight" separation between banks and non-bank institutions and because of the huge amount of loans given out for stock market trading.

Dalhaise said Malaysia's imposition of capital controls, which made its ringgit currency effectively worthless outside the country from October 1, was not conceptually wrong.