HANOI, Oct. 8 (Xinhua) -- Financial institutions in Laos are in good health, even though many banks around the world face financial crises, the Vientiane Times reported on Wednesday, citing a senior policymaker in the local banking sector.

    Phouthaxay Sivilay, acting director general of the Bank and Financial Institution Supervision Department, under the Bank of Lao People's Democratic Republic, said his department has been monitoring the status of local banks and financial institutions ona daily basis, and believed them to be sound.

    "Banks and financial institutions here have sufficient funds in reserve to enable people to withdraw money and obtain loans to do business," he said.

    Phouthaxay said most financial institutions in Laos had no link to banks in the United States and Europe, so Lao people should not worry about money they had deposited in local banks.

    He said U.S. banks were in crisis because they had given loans too freely, so when borrowers could not repay the money the banks ran short of funds.

    But the situation in Laos was different, he said. Most of the banks in Laos were small and did not readily disburse loans. Most banks required proof of assets to guarantee a loan, while others needed evidence of a sound business plan and strong proof of a successful business before providing a loan.

    Phouthaxay said currently the inflow and outflow of money from Lao banks was stable. He said his department had advised commercial banks in Laos to strictly comply with banking regulations. "If all banks comply with the law, there should be no financial problems in Laos," he said.