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Banking System in the Lower Mekong System

In: Business and Management

Submitted By xiahui19890811
Words 2489
Pages 10
Banking system in the lower Mekong system
Introduction
In the last century, many reforms of the banking system have been done in Lao People’s Democratic Republic, Cambodia and Vietnam, the lower Mekong countries. Various policies and regulations were formulated in order to resolve the problems which were caused by planned economics system in these three countries. The development of financial system was mainly controlled by government and less freedom can be given so that it caused the less-developed problems among these Mekong countries. However, during the last decades, with the distribution of market-oriented economy government released the control of private enterprises and the discrimination of small and medium enterprises have been gradually eliminated. The banking system faced new challenge. New reforms should be done to adapt to the changing circumstance. The new regulatory and supervisory was strengthened for more efficient banking system. This essay will first illustrate the banking system in these three countries respectively and then find some similarities or differences between them during the reforms. Finally conclusion will be illustrated.
Banking system in Vietnam
In order to adapt to the transformation of economy system in Vietnam, much attention are paid on the banking reform and optimization. The financial liberalization process has been continued to accelerate.
(1) The government made the duties of specialized banks clear and commercialized the operation. In 1990, Vietnam formed state-owned banking system which consisted of the central bank and 4 specialized banks. The asset of these state-owned banks accounts for 70% of total asset in Vietnam. Vietnam’s economy was only supported by a “one-bank” system. However, because of the unclear responsibility this baking system could not play an efficient role during the economy. The problem of...

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