Reinforcing National Financial Supervision

The Ministry of Finance in collaboration with the International Data Group (IDG Vietnam) recently organised the 10th Conference - Exhibition Vietnam Finance 2013 with the theme " Reinforcing National Financial Supervision: Policy and Technology Initiatives". The event is aimed at connecting and sharing information related to information technology (IT) solutions to meet the requirements of enhancing the stability of the country’s finance sector and promoting economic development.

In fact, the construction and development of a financial supervision system to optimize finance and the economy is always a big task for any government. Globally, there is a trend in recent years to form more models of consolidated financial supervision. Vietnam is also facing many different opinions on the construction of the integrated financial supervision system or continuing to improve and enhance capacity of existing system. In recent times, there were many discussions with most comments in favour of restructuring Vietnam’s financial supervision system to become more integrated in order to fulfil the mission of the financial supervision system for a small financial market, but having high concentration and rapid growth. This issue is currently receiving much attention from government agencies and financial professionals, because of its decisiveness in the optimization of the financial supervision of the financial markets.

 

Speaking at the conference, Deputy Minister of Finance Pham Sy Danh highlighted that ensuring national financial security and supervising the operation of the national finance are indispensable requirements for any country. In recent years, though faced with many difficulties, the financial sector has seen fast and steady growth in many aspects and the national financial security is guaranteed. At the same time Vietnam also forms a system of indicators in surveillance of financial markets. In particular, the three pillars considered most important to the nation's financial system are public finance, corporate finance supervision and financial market supervision. The three pillars interact towards the common goal to ensure the security and safety of national finances.

 

According to Mr Dang Quyet Tien, Deputy Director of Corporate Finance Department, Ministry of Finance, the financial management and supervision of the state capital in state-owned enterprises is a necessary move in order to assess the performance of state-owned enterprises, help state management agencies to promptly detect weaknesses in business processes in order to set alerts and give timely corrective measures. However, the practice in recent years shows that the provisions on monitoring and evaluation of state-owned enterprises’ performance are insufficient and do not create an effective mechanism to detect and warn business owners about financial risks, etc. Currently the Ministry of Finance is implementing the guidelines outlined in Decree 61/2013/ND-CP to quickly put monitoring mechanisms that the Government has approved into practice.

Representative of the National Financial Supervisory Committee, Mr Ha Huy Tuan, Vice President of Financial Supervisory Commission, said that prudential supervision is gradually improving in Vietnam on the basis that the government and other agencies in the financial safety network are aware of the importance of macro safety monitoring for the stability of the financial system. However, according to Mr Tuan, to contribute to improving macro prudential supervision capabilities, it is necessary to focus on the following things: respect market discipline, well-prepare knowledge and understanding of the economic conditions and financial markets for the staff of macro prudential supervision agencies.

Besides, according to Mr Tuan, in the medium and long term, Vietnam needs to make a comprehensive assessment of the situation and the ability to deploy macro prudential supervision in Vietnam, on this basis, building the legal framework for this operation as well as construction of a coordination mechanism which is actually effective among agencies in the financial prudential network (including the Ministry of Finance, the State Bank, Financial Supervisory Commission and the National Deposit Insurance Agency) in accordance with international practice and practical conditions of Vietnam.

Mr Doan Thanh Tung, Director of IT Department, the State Securities Commission (SSC)
The Activity of the stock market has a big impact on the investment environment in particular and the economy in general. Derived from the complexity and sensitivity of the stock market, operating and monitoring the market to ensure openness and transparency is essential to ensure the operation of the market is efficient and justified to protect the legitimate rights and interests of investors.

The application of modern information technology in monitoring and information disclosure in the securities market has brought many practical benefits. However, it needs to strengthen the close cooperation between the SSC and the international partners, build solutions to respond flexibly to changes in business processes, focus on the survey process, system design analysis and especially the need to select contractors with good quality, professional knowledge to establish environmental management to operate market effectively and build an open, transparent and credible market.

Mr Tran Kim Chung, Deputy Director of the Central Institute for Economic Management
Maintaining financial stability is not and can not be the only mission of a certain state agencies, but it requires the combined efforts of many different authorities. Besides, a strong financial infrastructure is clearly an important prerequisite to ensure that financial institutions performing well and the financial markets operating smoothly. Conversely, if a solid financial institution is lacking, despite the fact that the financial institutes try hard , they will fail to execute their mission, no one else, the government should take over the role of setting up strong financial infrastructure for the country.

 

With the aims to strengthen and maintain a stable financial system, Vietnam should clearly delineate the functions, duties and powers of each member of the financial prudential network in the country - State Bank of Vietnam, the Ministry of Finance, the Financial Supervisory Commission National Deposit Insurance of Vietnam as well as relations and coordination between these agencies.

Mr Pham Cong Minh, Deputy Director of the Department of Financial Informatics and Statistics, Ministry of Finance
In supervision, safety issues and information security are very important, because once the information is distorted, it will distort the final decision, causing huge damage to the economy.