Periodic Essay

Banking reform in Vietnam

Abstract: Vietnams banking sector is expected to have one of the highest growth rates in Asia during the next few years due to the countrys continued economic expansion, rising household incomes, and relatively low penetration of existing banking services. Over the past two decades, the Vietnamese government has undertaken a series of reforms to strengthen and modernize the sector as part of the countrys move towards a more open and marketoriented economy. Many of these reforms have also been motivated by Vietnams growing participation in international agreements and ongoing efforts to adopt international standards such as the Basel capital framework. Key reforms include a restructuring of the banking system, a gradual opening to foreign investment, the partial privatization of state-owned banking institutions, and measures to strengthen the capitalization of Vietnamese banks. This Asia Focus report provides an overview of Vietnams banking sector, reviews significant developments since the mid 1980s, and highlights key challenges to reform implementation.

Keywords: Banks and banking - Vietnam;

Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: Asia Focus

Publication Date: 2011

Issue: June