Vietnam Committed to Financial System Reform

Delivering the opening address to the conference, Prime Minister Nguyen Tan Dung emphasised that the conference will be a forum for the exchange of open and straightforward discussions, sharing research results, experience and in-depth analyses on the Vietnamese economic situation on the basis of drawing lessons from international experience to propose specific practical policy solutions to promote stability and sustainable development in Vietnam, and on the regional and international scale, thus strengthening cooperative relations of supervisory agencies in East Asia, and between East Asia and other regions.

 

This is also an opportunity for financial supervisory agencies in the region to promote information exchange and experience sharing; discuss financial infrastructure and monitoring coordination to boost intra-region financial transactions; build policies, safety criteria and financial standards based on regional characteristics to ensure the health of capital flows; and exchange policies on prevention and response of external financial shocks on Northeast Asia and Southeast Asia.

 

Chairman of National Financial Supervisory Committee (NFSC) Vu Viet Ngoan said banking security is a matter of deep concern to foreign investors. He said the most difficult time for financial markets was over at the end of 2011 when the Vietnamese banking system faced numerous problems with liquidity, high and rising bad debts at many banks, and even insolvency which led to bankruptcy. The market sentiment was very downbeat at that time. Fortunately, the Government made aggressive and timely measures to regain the confidence of the people and investors by deploying measures to ensure maximum interests of money depositors to take advantage of capital raised from the public. On the other hand, the Government had timely solutions to support and prop up troubled banks. At present, Vietnam’s financial and banking system has restored stability. However, in the near term, Vietnam has to deal with bad debts to maximise capital flows for the economy and achieve sustainable development in the long term.

 

Jeffrey Miller, financial expert of the Bank for International Settlements (BIS) in Asia-Pacific, said countries in East Asia should try to meet the Basel III standards, which emphasise raising liquidity and minimum capital requirements of banks in the 2010-2020 period to strengthen financial systems. In fact, in view of foreign experts, the Vietnamese financial system has made some efforts in systemic reform, but the result remains quite far from international financial standards. The distance has even widened since 2008-2009 when the world financial crisis broke out and the world adopted new financial reform. He said while many other nations such as Japan, South Korea, Singapore and Thailand have met 12 out of 14 standards on capital and liquidity of Basel III, Vietnam and some others including Laos and Cambodia are still in the process of starting up. Therefore, the Vietnamese Government should further strengthen economic transition and restructuring its financial system if it does not want to lag behind in the coming years.