TAILIEUCHUNG - Vietnam - Conflicted preferences

The implementation of international banking standards in Vietnam has been the subject of contestation between reformist and conservative factions within the governing political party. In any given period, the speed of implementation has been affected by which of these factions dominates regulatory decision-making, as well as the health of the banking sector | FULBRIGHT UNIVERSITY VIETNAM FULBRIGHT SCHOOL OF PUBLIC POLICY AND MANAGEMENT Vietnam - Conflicted preferences Authors Que-Giang Tran-Thi and Tu-Anh Vu-Thanh Summary The implementation of international banking standards in Vietnam has been the subject of contestation between reformist and conservative factions within the governing political party. In any given period the speed of implementation has been affected by which of these factions dominates regulatory decision-making as well as the health of the banking sector. The adoption and implementation of Basel standards in Vietnam has gone through three distinctive periods from 1999-2006 the internationally-oriented reformist faction pursued international regulations in order to discipline state-owned banks and improve the functioning of the financial sector. From 2006-13 the central bank SBV formally adopted Basel II but a domestic banking crisis effectively halted implementation. More recently there has been a return to pro-Basel preferences. However interventionist financial policies high implementation costs the low internationalisation level of the banking sector and the lack of competent technocrats inside both the State Bank of Vietnam and domestic private banks have all contributed to a high level of forbearance in Basel enforcement. Page 1 5 Vietnam - Conflicted preferences_ Basel II Credit Risk standard Credit Risk Advanced Operational Risk Basic Operational RiskAdvanced Market Risk Standard Market Risk Advanced Pillar2 Pillar3 Basel III Liquidity Ratio Definition of Capital Counterparty Risk 3 Conservation Buffer Counter-cyclical Buffer Leverage Ratio 3 Dom Systemic Importance Legend n Implemented In Progress e Not implemented Source official documents and expert interviews 2017 Political economy background Vietnam began the transformation from a centrally planned economy to a socialist-oriented market economy in 1986 and since then international economic .

• Ngân hàng - Tín dụng
• Vietnam Conflicted preferences
• International banking standards in Vietnam
• International banking standards
• Factions dominates regulatory decision making
• The governing political party