Download Promoting a Better Functioning and Regulated Financial Market in

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2013/SOM1/EC/WKSP/007
Session 2
Promoting a Better Functioning and Regulated
Financial Market in Viet Nam
Submitted by: Viet Nam
Macro APEC New Strategy for Structural
Reform Workshop: Mid-Term Progress in
Implementing ANSSR
Jakarta, Indonesia
30-31 January 2013
2/1/2013
Promoting a Better Functioning and
Regulated Financial Market in Vietnam
Jakarta, 30 January 2013
Outlines
|
Background
|
Vietnam’s ANSSR priority: financial market
development
|
Timeline for implementation
|
Progress in 2011-2012
|
Practical challenges during implementation
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Background
Some features of Vietnam’s financial market prior to
2010
|
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Rapid development, especially since 2005 when the
prospect of WTO accession became more apparent.
Increasing participation of foreign entities, alongside
transformation of local-level private banks into
national-level ones.
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Largely bank-based.
|
Financial depth: still shallow, albeit improving.
Some key issues
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Inherent risks of speculation, while financial
supervision has been less than fully effective.
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Low competitiveness of some local private banks.
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Increasing cross ownership in banking.
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NBFIs remained weak.
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Weak resilience of financial system to adverse shocks.
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Vietnam’s ANSSR Priority:
Financial Market Development
Some key socio-economic targets by 2015:
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Economic growth of 6.5-7.0% p.a.;
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Contribution of TFP growth to economic growth: 28-30%;
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Gross investment: 35-36% of GDP in 2011-2015;
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Inflation: < 10% p.a.;
|
Budget deficit: < 5% of GDP;
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Poverty rate decreases by 1.5-2 percentage points p.a.
Vietnam’s ANSSR
priority for better
functioning and
regulated financial
market
Improving efficiency
and governance of
financial
intermediaries
Establishing and
enforcing effective
system of financial
supervision
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Timeline for implementation
|
Duration: 2011-2014.
|
Starting first with resolution of bad debts (toxic level)
in line with restructuring of weak banks: by mid2013?
|
Improvement of financial supervision: gradually, but
should proceed fundamentally by 2013.
|
Promotion of financial market competition: gradually.
|
Regional financial cooperation: tentatively 2015 and
beyond.
Progress in 2011-2012
Slow progress, due to:
y Difficulties in international and domestic economic
context.
y Untimely documentation of risks and adjustment
costs related to financial market restructuring.
y Weak enforcement of regulations over financial
supervision.
| Yet successes so far:
y Increasing competition in financial market Æ more
efficient allocation of resource
y Improved credibility of financial and monetary
policies.
|
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Practical challenges during
implementation
|
Underdeveloped information system.
|
Market-based adjustment vs. administrative
intervention.
|
Measurement of contribution by different policy
instruments.
Q&A
THANK YOU!
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