From Monobank to Commercial Banking: Financial Sector Reforms in Vietnam

Jens Kovsted, John Rand, Finn Tarp, authors

Date of publication: 2005

Publisher: ISEAS / NIAS

Number of pages: 170

Code: BM271

Ebook is available

Reviews

"... this monograph is the first such exhaustive review since a World Bank survey of 1995. As such it should prove to be as serviceable to the specialist as it is informative to the non-expert. Sound, well-structured, and with scarcely a word out of place, the text reveals impressive theoretical underpinnings. The mantra running throughout this book, is that, although significant progress has been made, much remains to be done. The end of the beginning has been reached rather than the beginning of the end" (Aseasuk News).

"... the book gives a penetrating insight into issues such as regulatory regimes and central bank independence and grapples with what actually occurs 'on the ground' rather than what is said in the official announcements or even what is 'on paper'. This incisive, analytical approach is apparent even in the first two chapters describing the transformation of the Vietnamese economy from the start of 'Doi Moi' in 1986 to the outbreak of the Asian financial crisis in 1997. The insights of the book provide a useful cautionary balance to the exuberance of the world financial market as it finds Vietnam emerging from the status of a transitional economy" (Journal of Asian Business).

About the publication

This study analyses the difficulties and problems encountered in transforming the Vietnamese financial sector from one that is subordinate to government objectives and goals to an autonomous sector guided by market forces and competitive pressures. Here, the history of financial sector liberalization is traced and close attention paid to the activities and autonomy of the State Bank of Vietnam, the institution responsible for the supervision and regulation of the financial sector in Vietnam. Overall, the authors argue that ensuring a timely, fair and transparent supervision and regulation of the financial sector is of central importance to financial sector development and stability. Liberalizing financial markets is not solely a question of limiting and/or restricting government influence but may in fact involve the opposite, the influence and power of supervisory and regulatory institutions in many cases needing to be strengthened.