TAILIEUCHUNG - Development of the national financial safety net in Vietnam

After the world financial crisis in 2008, a lot of countries, including Vietnam, started to pay attention to setting up a financial safety net, in order to keep security for financial institutions specifically and financial systems generally. The paper analyzes the actual state of the national financial safety net in Vietnam and suggests measures to improve it, including: 1) setting up the model of national financial safety net; 2) building legal frameworks; 3) strengthening members’ capacity; 4) mechanism of warning and intervention; and 5) develop international cooperation. | Development of the National Safety Net in Vietnam DEVELOPMENT OF THE NATIONAL FINANCIAL SAFETY NET IN VIETNAM NGUYEN THI HOAI LE * Abstract: After the world financial crisis in 2008, a lot of countries, including Vietnam, started to pay attention to setting up a financial safety net, in order to keep security for financial institutions specifically and financial systems generally. The paper analyzes the actual state of the national financial safety net in Vietnam and suggests measures to improve it, including: 1) setting up the model of national financial safety net; 2) building legal frameworks; 3) strengthening members’ capacity; 4) mechanism of warning and intervention; and 5) develop international cooperation. Key words: Financial safety net, framework, measure, mechanism, security. 1. Financial safety net According to the International Monetary Fund (IMF), viewed from the perspective of a financial instituton, finnacial safety reflects the security extent of an institution, when it performs effectively inherent functions (funding allocation, provision of means of payment for economic activities etc.); at the same time, it is capable of restricting or tackling risks before the financial – banking system falls in danger. Financial safety of an intermediary financial institution can be seen, when properties and funds are stable to solve all debt responsibilities and risks; there is no crisis and the financial state looks sustainable. At a larger extent, financial safety of intermediary financial institutions is not only the financial state of each institution, but also the financial security of the entire system, where normal-scaled “shocks” stemming from an individual financial institution cannot cause a financial crisis for the financial system generally and other financial institutions particularly. According to the Organization for Economic Co-operation and Development (OECD), the financial safety net is a tool of the public policy, which is designed to

• Ngân hàng - Tín dụng
• Development of the national financial safety net
• Financial safety net
• The national financial safety net in Vietnam
• National financial safety net
• Building legal frameworks
• Strengthening members’ capacity