Financial security for vietnam financial market in international economic integration context

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INTRODUCTION
1. Significant of the research
Vietnam, a developing and integrating country, from a low income country and has
now become first level country of the middle income group. Vietnam has the small financial
and economic system, therefore, it is easily vulnerable with international financial,
economic crisis and the hard of domestic economy.
To ensure the financial security, especially to ensure the financial security for the
financial market is the top issue of Vietnam in the development and integration into the
international economy. For this reason, the Ph.D student has chosen to research the topic:
“Financial security for Vietnam financial market in the international economic integration
context” as his Ph.D dissertation.
2. Overview of the research
+ The first study: “Solutions to enhance the anti money laundering activities in
Vietnam in the international economic integration context”.
+ The second study: “Solutions to enhance the micro supervision activities for credit
institutions in Vietnam in the international economic integration context”.
+ The third study: “Some main solutions to ensure the financial security for the
operations of Vietnam’s monetary market in the international economic integration context”
These 3 studies of the Ph.D student has been approved by the Board of Approval of
the on 25 November 2011
On 22 March 2013, the Ph.D student has defended the dissertation at the basic level
with the Board of dissertation at the basic level. After announced with the result of the Ph.D
dissertation at the basic level and received the comments from the Board’s members, the
response of the Chair of the Board, the Ph.D dissertation has been further supplemented to
become perfect.
3. The research objective
+ To deepening the scientific aspect of the financial security for the financial market;
+ To assess the actual circumstance of financial security of the Vietnam financial market,
focusing on analyzing the financial security of the monetary and banking market, securities

market, insurance market.
+ Recommend the best solutions to assure the financial security for the Vietnam financial market.
4. Research methodology
On the basis of materialistic dialectics method, historical materialistic method, statistics
method, generalizing and factual researching at State Bank of Vietnam and some credit
institutions, securities companies, study the documents of international organizations to
conduct the analyzing, induction to find the best solutions for the research purpose.
5. Research scope and subjective
Research in general the financial market, financial market’s security, focusing on
researching the monetary and banking market and securities, insurance markets that are
the major actors that affecting the financial market since Vietnam has become WTO
member. For the monetary and banking market, the Ph.D student focuses on researching
the operating market between credit institutions and economic organizations, residents
and other organizations.


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- The subjective of the research is the issue of financial security for the Vietnam’s
financial market, taking the monetary, banking market, securities, insurance market to
assess and evaluate.
6. Structure of the dissertation
In addition to the introduction and conclusion, the dissertation covers 3 chapters:
Chapter 1: The theory basis for financial security of the financial market in the
international economic integration context;
Chapter 2: The factual of financial security of financial market, assessing, identifying,
causing and lesson learnt;
Chapter 3: The solutions for the financial security of Vietnam’s financial market in the
international economic integration context.

CHAPTER 1

THE THEORY BASIS FOR FINANCIAL SECURITY OF THE
FINANCIAL MARKET IN THE PROCESS OF INTERNATIONAL
ECONOMIC INTERGRATION
1.1. Overview of financial security of the financial market in the international
economic integration context
1.1.1. The definition of financial security
According to the Governor of the Central Bank of Turkey, financial security can be
strengthening through the smooth operations of the existing system. This is the general
overview and covers the payment system, information techonology infrustrcture as well as
management and supervision framework. The financial safety and financial security are
strictly linked.
Accroding the document titled the national financial security, theory, alert, policies
issued by the finance publisher in Juy 2004 of the Professor, Ph.D Tao Huu Phung (chief
editor) and the research documents of group researchers of State Bank of Vietnam and
Ministry of Finance, the financial security can be defined as follows:
Financial security is a basic concept to indicate a stable, secure, strong and no crisis
financial situation.
Stability can be defined as maintaining the normal operations, no sudden and
unpredictable changes. However, it should be understood stability during the movement and
development. Stability does not mean trying to keep things unchanged but keeps stability
during the move on process, no limit of improvements and perfectionism.
Security can be defined as the circumstance of no danger due to inner and outer
influence. Keeping security means not causing damage to ourself as well as preventing and
against the outside attacking to damage. If stability is the basic foundation, security is the core
elements to regulate the movements of financial status.
Strengthening is the basic ground for stability and security, a weak financial status can
not be kept stable and assure security.
Crisis is the final boundaries of losing financial security therefore; avoiding crisis is

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the top priority of any financial security solutions. Together with being in financial crisis is
finance unbalancing, meaning the payment liabilities will be over the payment instruments
at a specific time.
Ph.D student has agreed with the financial security of the above researchers, however,
this theory has only been in general mentioned in terms of “financial status”. Therefore,
with the purpose of improving the scientific and factual application of financial security, it
is necessary to research in deep the financial market and finance sectors.
1.1.2. Classifying the financial security
1.1.2.1. Classifying based on level and scope of management
a. National financial security;
b. Financial security of enterprise;
c. Individual financial security (inhabitants - family);
1.1.2.2. Classifying based on sector
a. Financial security of state sector;
b. Financial security of financial intermediary;
c. Financial security of enterprises and inhabitants.
1.1.2.3. Classifying based on financial functions
a. Financial security in mobilizing financial source.
b. Financial security in allocating financial resources.
c. Financial security in utilizing financial resources.
1.1.2.4. Classifying based on geographical
a. Local financial security;
b. National financial security;
c. Regional financial security;
d. Global financial security;
1.1.2.5. Classifying based on nature
a. Real financial security;
b. “Illusive” or formalism financial security
1.1.2.6. Classifying based on extend

a. High extend of financial security;
b. Secured financial security;
c. Unsecured financial security;
d. Lost in financial security;
1.1.2.7. Classifying based on financial market
a. Based on the market specialized, market security, debt instruments security; capital
instrument security; derivative instrument security. In general, the financial market operated
on the basis of trading the financial properties;
b. Based on the market structures: primary market security and secondary market
security;
c. Based on the time line of financial instruments: financial security of the monetary and
banking market; financial security of capital market; financial security of secuirities market;
1.2. Overview of financial market
1.2.1. Theory of financial market


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Financial market is the market of financial instruments in which financial source will
be transferred from the person with capital abundant to the lack one through purchasing,
trading the financial instruments.
It can be understood simply as follows: the financial market is the place where the financial
instruments are traded. Financial market is the environment where the financial systems are
operating.
The main functions of financial market are the process of transferring the capital from
the abundant person to the lack one.
In the movement of the financial market there has been the participation of market
supervisors with the purpose of creating the transparency, effectively operating market,
minimize the operational risks of the financial market, maintain the stability, security for
the market and promote the its development.
1.2.2. Classifying the financial market.

The financial market is very complex and variety, each kind of financial market is
formed and developed with its own main functions and purpose depend on the economic,
social development of different countries, depend on the financial instruments and payment
methods, different participants of the market.
1.2.2.1. Based on the order of issuing, trading and structure of the market: financial
markets are divided into primary market and secondary market.
1.2.2.2. Based on the market specialized: the financial markets are divided into capital
instrument market and derivative instrument market.
1.2.2.3. Based on the time line of financial instruments: financial markets are divided
into monetary and banking market and capital market.
1.2.2.4. Based on the subject of the market, the financial markets include:
+ Borrowing and lending market of the government;
+ Borrowing and lending market of financial intermediary;
+ Borrowing and lending market of enterprises;
+ Borrowing and lending market of individuals;
1.2.2.5. Based on the operating criteria of the market
Financial market is divided into monetary and banking market, security market,
insurance market. This method of dividing perfectly matches with the focus of the Ph.D
research.
+ Monetary and banking market is the place for short, medium and long term capital
trading. Monetary and banking market includes:
- Market of mobilizing and lending capital of credit institutions to financial
organizations, inhabitants, other organizations, individuals (often referred as first):
- Market of borrowing and lending among credit institutions (often referred as second) .
- Market of borrowing, buying, selling between central banks and credit institutions
(often referred as third).
+ Securities market means the market where the buying and selling securities
activities occurred. Taking into consideration the nature of the market, the securities market
is the place to relocate the capital from the abundant owner to the needed one in the
concentrated and no concentrated market economy,

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+ Insurance market means the market that occurring the buying and selling insurance
products. The insurance market includes the life insurance market and non life insurance
market.
1.2.3. The inter-relations between the elements establishing the financial market.
The markets that contribute to the establishment of the financial market have a strictly
interrelations, specifically the 2 major markets that are the monetary and banking market,
the insurance market.
The monetary and banking market has become more consistent with the capital market
in the operation of the national financial market and has been globally. The vulnerability of
the economy will affect this market and then, in turn, will immediate affect the other
markets.
Nowadays, together with the development of the global economy, the operations of
the financial market is becoming more and more complicated, sophisticated, the financial
instruments have been strictly interrelated, the markets are inter reacted and influenced, the
border line of the different markets are only relatively, the financial instruments are moved
inter related among the markets, inter transferred.
Financial market is the being influenced directly by the financial policies, monetary
policies to obtain the target of the economy.
1.2.4. The instruments of financial market.
+ The debt securities include bonds, bill of credit, commercial bills and other
receivables.
+ Capital securities are often called as shares, equivalent to the amount of shares
owned in the enterprise.
1.3. Financial security within the operations of the financial market.
Financial security of the financial market means the financial security of the markets
that contribute to the financial market includes monetary and banking market, securities
market, insurance market.

It is the stability, safety, developing manner and ability to against the crisis of the
monetary and banking market, securities market, insurance market. Besides, the elements
that affect greatly the financial market include the public debts, meeting the standard of anti
money laundering of nations and financial institutions.
1.3.1. Financial securities for the operation of monetary and banking market.
1.3.1.1.Therory of financial securities for the monetary and banking market.
+ To assure the financial security for the operations of monetary and banking market
means to assure the financial security for the 3 following markets:
* The market to mobilize capital and lending of credit institutions to individuals,
financial institutions and other institutions (referred as the first market).
* The inter borrowing and lending market of credit institutions (referred as the second
market).
* The lending and buying, selling market among central banks and credit institutions
referred as the third market).
Financial security for the operations of the monetary and banking market is the basic
definition indicates the stability, safety, development and not being crisis during the
operation of the monetary and banking market.


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1.3.1.2. Affecting factors and standard of financial security of the monetary and banking
market operations.
a. Affecting factors
a1. Stabilize the operations of the monetary and banking market.
*) Stabilize the operations of the first market
+ Stabilize the capitals;
+ Stabilize utilizing capitals;
*) Stabilize the operations of the second market
*) Stabilize the operations of the third market
a2. Secure the operations of the monetary and banking market

*) Secure of the first market
+ There has been many factors in which the major ones required the credit institutions
to meet in order to secure the operations of the credit institutions include:
• Capital adequacy ratio;

• Credits margin;
• Debt service coverage ratio;
• The margin of capital contributions, buying shares;
• The rate of credit granted compared with capital called up.
In addition, with the developing requirements of countries and over the different time,
the requirements of the security for the operations of credit institutions should be added or
changed in increasing trends.
*) Secure for the second market
To assure the operations of this market in the competition means identify the
liquidity of the market, conditions to borrow and pay debt comply with the security
policies of the system to assure the banks, non financial banking institutions operating in
accordance with the market regime but also being controlled and monitored by the central
banks.
*) Secure for the third market
This is the buying and selling activities between central banks and credit institutions. As
the stability of this market, the security in a broad meaning is creating the safety for the policies
of stabilizing the value of money, safety for the operations of credit institutions, not simply
means safety (receive all the money once selling valuable papers or receive all the amounts and
interest once giving loan…)
a3. Develop the operations of the monetary and banking market
*) Develop the first market
*) Develop the second market
*) Develop the third market
a4. Increase the ability to prevent the crisis of the monetary and banking market
Crisis is the final limit of lossing security for the monetary and banking market. The

monetary and banking market is systematic and highly inter affected.
Therefore, the first market is the highly important one for the safety, stability and


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development of monetary and banking market.
In conclusion: financial security for the operations of the financial market is a stable
status, safety, development and avoid of crisis of the monetary and banking market.
b. The indicators to reflect the security of financial stability for the monetary and
banking market
b1. Capital adequacy
For the credit institutions operate internationally, these procedures at least not
lower than the requesting ratio of capital respectively stipulated by Basel (at present
not less than 8%).
The capital separate ratio and combined risks means the rate of combined capital
should always ≥8% (Basel regulations). To assure the financial security, most of the
countries request the minimize rate must be higher than 9%. According to PH.D research
point of view, this rate should always higher than 10% for every credit institutions to assure
the safety of the credit institutions.
b2. Credit limitation to assure the financial security
+ The total of outstanding debts of a credit institution for a customer should not be
over 10% of capital owned of credit institutions (safety margin should not be over 15% common in many countries).
+ The total of outstanding debts and the outstanding of grantee of credit institution for
a customer, in the point of view of Ph. D student it should not exceed 20% of the owned
capital of credit institutions (the safety margin is 25%- common in many countries).
+ The total of outstanding debts of credit institutions of a group of customer should not
exceed 45% of the owned capital of credit institution (the safety margin is 50%- common in
many countries).
+ The total of outstanding debts and the outstanding of grantee of credit institutions
of a group of customer should not exceed 55% of the owned capital of credit institution (the

safety margin is 60%- common in many countries).
b3. The ratio of ability to payment to assure the financial security
+ The minimize ratio under the PH.D research point of view is 20% equal the total of
current assets payable immediate divided the total payable liablilites (the safety margin is
15%- common in many countries).
+ The minimum ratio equal to 1.5 times of the total amount of current assets payable
within 7 days since the next day and the total liabilities payable within 7 days since the next
day (under the point of view of student), This ratio is adequacy, in many countries the
common is 1.
b4. Limited capital contribution and share purchase
+ The capital contribution of the credit institution in a enterprise, investment funds ,
investment projects , other credit institution shall not exceed 8 % ( in view of the PhD
student). The safety ratio shall not exceed 11 % as usual.
+ The total capital contribution and share purchase of a credit institution and its
subsidiaries, joint ventures, associated companies of credit institutions in the same
enterprises, investment funds, investment projects, the other credit institutions shall not
exceed 8 % of the charter capital of enterprises, investment funds, investment projects other


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credit institutions ( in view of the PhD student) . Adequacy ratio of 11% as usual .
+ The total capital contribution and share purchase of credit institutions in all the
subsidiary companies shall not exceed 20 % of charter capital and reserve funds ( in view of
the PhD student) . As usual safety is 25 % .
b5 . Credit ratio of total capital mobilization
+ For the Bank only used the mobilized capital to finance credit and after credit is
provided should ensure the affordability and safety ratio should not exceed 80 % for each
bank and the average of the commercial banking system .
+ For the non financial credit institution shall not exceed 85 % for each of the non
financial credit institutions and for the whole system 's average , the non financial credit

institutions
b6. The ratio of overdue liability to total outstanding loans
This ratio is always less than 5% at any time for each credit institution and the
system's average credit institutions.
Ratio of financial security of overdue liability (NPL-Non-Performing Loans) is always
lower than 3% for each credit institution and for the whole system.
b7. Percentage of the profits earned by credit institutions and the whole system is
always greater than 1% over the year. Each credit institution must continuously be
profitable. All systems have gained increasing interest maintained through the years. A
credit institution losses, that credit institutions loss financial security. Even credit
institutions losses or reduced profits compared with the previous year, will also lead to
financial insecurity of the whole system.
c. The indicators to evaluate the endurance credit shocks of credit institutions on the
financial markets
For each specific risks in banking operations, there has been different technical
endurance testing. The following risks are common risks that supervisory, inspection and
management agencies, the bank to measure to evaluate in order to avoid the crisis can
happen to the monetary and banking market:
+ Credit risk;
+ Interest rate risk;
+ Exchange rate risk;
+ Liquidity risk;
+ Risk interbank spreads.
Each kinds of risk have different technical endurance testing and request different data.
c1. ST on credit risk
+ The method is based on the provision
+ ST macro approach
c2. ST on interest rate risk
+ Method of gap analysis revaluation
+ Method of analysis period

c3. ST to exchange rate risk
+ direct ST method with the exchange rate risk
c4. ST on liquidity risk
+ The method is based on the balance sheet


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+ Approach based on the period (cash flow method)
c5. ST to spread risk
+ ST method for the risks of inter banking
+ ST method to spread macroeconomic risks
1.3.2. Financial Security for the securities market
1.3.2.1. The definition of financial security for the securities market
Similar to the monetary and baking market, financial security for the operation of the
securities market is to ensure market operate stable, secure, developing and avoid of crisis
for the market activity .
The nature and content of: stability, security, development and non crisis will be
identified in the concentrated market, decentralized market and market participants in the
securities market.
1.3.2.2 . Financial security factor for the operation of the stock market
a. Stable operation of the ssecurities market
b . Safe operation of securities markets
c . Develop the activities of the securities market
d . Enhancing the ability to prevent the crisis of the securities market
Thus, to prevent the crisis of the market, there should be macro policies to stabilize and
develop economy to avoid economic crisis. In addition, it is necessary to avoid the negative
effects of economic crisis from the outside , stabilize and develop stable the primary market
(release market) , the secondary market (the market for trading the released securities), strictly
control the activities of participants in the securities market such as stock trading center,
companies issuing securities , the securities trading companies, investors, speculators.

1.3.2.3. Financial security factor for the operation of the securities market
1.3.2.3. The principles, international standards for monitoring securities trading
activities, the indicators reflect the financial security of the securities market.
a. The principles and standards of international securities trading activities.
The principle is directly related to the financial intermediary institutions participating
securities market, include:
+ The supervisory agency has to ensure minimum conditions for market access for market
intermediary institutions while ensuring fairness to these organizations. The purpose of
monitoring is to reduce the risk of loss causing to investors due to the error or illegal
behavior or capital inadequacy of the financial intermediary.
+ Must have requirements on initial capital and capital in the business process, the
safety regulations reflect the risks that the financial intermediaries may encounter.
+ The financial intermediary must comply with standards for internal structure,
professional operations to protect the interests of investors and appropriate managing risk.
+ There must be provisions on bankruptcy procedures of financial intermediaries in
order to minimize losses to investors and risk control systems.
b. The indicator reflects the financial security of financial institutions participating
securities market
+ Develop financial safety indicators based on the criteria applied to the banking
system on the principles of Basel I and Basel II. European Union system has been applying
these principles for the financial institutions participating in the securities market. Securities


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trading organizations must always meet:
Self financing captial I + Self financing
≥ 8%
captial II
Total assets at risk
To meet financial security standards the PhD student believes that this ratio should

always greater than 9%.
+ Apply the method of capital net (Net Capital Approach). The minimum of net capital
maintained of securities companies is 2% of total customers’ loans and will receive a
warning if the level is lower than 5%.
In view of the PhD student, the minimum ratio to ensure financial security should not
less than 5%, according to a warning by the U.S. supervisory agency.
1.3.3. Financial security for the insurance market
1.3.3.1. The concept of financial security for the insurance market
Thus, financial security for the insurance market is to make markets operate safely, stabile,
developing and avoid the impact of the market crisis.
1.3.3.2. The principles and international standards of supervising insurance business.
ICP includes 28 principles ICP with 7 cluster with the following main topics:
+ The principle of cluster to ensure the conditions of effective supervision,
including principles 1 for effective supervision;
+ The principles of cluster monitoring system from principles 2 to 5;
+ The principle of cluster being monitored from principle 6 to 9;
+ The principle of cluster being monitored the activity from principle 10 to 15.
The principle of the prudential supervision, from principle 15 to principle 23
+ The principle of cluster markets and customer, including the principles from 24 to 27;
+ Cluster on anti-money laundering and combating the financing of terrorism in the
principle 28.
1.3.3.3. The criteria ensure financial security for the operation of the
insurance market
For the direct supervision of solvency, in some countries based on the provisions of "solvency margin"
(Solvency margin), in some other countries apply the "risk-based capital "(risk-based capital).
The supervisory agency requires the company to maintain this ratio is not less than
100% in order to meet capital adequacy requirements.
This ratio is being calculated as follows:
Variable ability to make payments
≥ 100%

Coefficient of solvency margin =
Solvency margin standard
Self financing
capital =

In view of Ph.D student, to ensure the financial security of the system, this ratio
must be ≥ 110% (absolute safety area is 10%)
For the second method of "risk-based capital", the minimum amount of capital to
compensate for the risks that insurance companies face will be calculated based on the
degree of risks.


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CONCLUSION OF CHAPTER 1
Thus, financial security for the financial markets means to ensure the stable, secure,
devlop and non crisis of market’s operations. The financial market consists of a variety of
markets operating together of which, particular importance is the operation of monetary and
banking markets, ssecurities market, insurance market to be stable, safe, developing and
prevent the crisis that will create the conditions to ensure financial security for the financial
markets. The monetary and banking market, securities markets, insurance markets have
tight relationships with each other, the operations of this market will ensure that financial
security will have positively impact on the security of other markets and vice versa, once
this market not ensure financial security, it will have negatively impact on other markets
and have negatively impact on the operations of financial markets nationally as a whole and
in some cases could adversely affect the financial markets of the region and negatively
affect global financial markets. With this special meaning, the solutions of financial security
for financial markets is of important to secure financial security for every country ,
contributing to the security for global financial markets .
Monetary and bank market including the first, second, third market, market of which the first

market plays a decisive role. To ensure financial security for monetary and banking market, each
component market have to ensure adequate factors and indicators to ensure financial security for
safety, stability, development and prevent crisis.
+ Criteria to ensure financial security for monetary and banking market including
criteria for minimum capital adequacy for organizations and the whole systems, criteria of
credit limit and the ratio of solvency payment; limit of capital purchasing equity; the rate of
total granted credit of the total capital mobilization; maximum limit on overdue loan ratio,
rate of profits. The criteria to assess the stamina of each organization participating in the
market and the system as a whole to ensure the system can avoid the effects of the crisis .
+ The factors that affect the financial security for the securities market including:
security, stability, development and ability to prevent a crisis. The indicator reflecting
financial security for financial institutions participating into securities market also include
ratio of minimum capital, the ratio of net capital to meet the market liquidity .
+The factors that affect the financial security for the insurance market include the following
factors: safety, stability, development and crisis prevention capabilities…The factors affecting
financial security for financial institutions participating in the insurance market including the
minimum criteria of solvency margin, the criteria of minimum capital...
The monetary and banking market, ssecurities market and insurance market operate
consistently within the financial markets.
Today, financial markets are highly interconnected globally both in volume and value
of transactions, thus, the country needs global solutions to prevent criminals using financial
markets to commit crime, to launder money ...

CHAPTER 2
THE FACTUAL FINANCIAL SECURITY OF FINANCIAL MARKET,


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ASSESSING, IDENTIFYING, CAUSING AND LEASON LEARNT

2.1. Overview of Vietnam financial market
By the end of 2012, total assets of the Vietnam’s financial system are 5,675 trillion,
equal to 213.2% of GDP, of which the total assets of the banking sector were 5,502 trillion
VND equal to 206.7% of GDP in 2012, the total assets of the securities companise are 82
thousand billion N|VND and equal to 3.1% of GDP, the total assets of the insurance
companies are 108 trillions of VND and equal to 4% of GDP. By late 2012, the stock
market capitalization is equal to 26% of GDP in the year 2012.
2.2. The factual financial security of financial market, assessing, identifying, causing
and lesson learnt
2.2.1. The factual financial security of Vietnam monetary and banking market, assessing,
identifying, causing and lesson learnt
2.2.1.1. The factual financial security of Vietnam monetary and banking market
Up to present, the credit institution system in Vietnam comprises of 125 institutions
and braches of foreign banks, cooperative banks and local credit funds include:
+ 05 state commercial banks and state join stock commercial banks.
+ Bank for Social Policies;
+ Vietnam Development Bank;
+ 35 Joint Stock Commercial Bank;;
+ 05 Joint Venture Banks;
+ 05 100% foreign capital banks;
+ 44 branches of foreign banks;
+ 17 financial companies;
+ 12 financial leasing companies;
+ Cooperative bank;
+ 1110 local credit funds;
As the operational scale of monetary and banking market is now quite large now
compare with the entire operation of the economy, ensuring financial security for the
operation of the Vietnam monetary and banking market means ensuring the stability, safety
and development for the vital market to stabilize and develop economy.
2.2.1.2.Assessing, identifying the financial security of the Vietnam’s monetary and

banking market, causing and lesson learnt
In recent years, Vietnam's banking and monetary market are not highly stable operated
due to the impact of unfavorable factors of global macroeconomic and Vietnam’s internal
economy. Taking into consideration all the factors to ensure financial security for Vietnam’s
monetary and banking market in recent years, that are stability, security, development and
against the crisis of the outer or inner of the economy, then these factors are fragile,
unstable. Especially bad debt of credit institution if calculate properly and adequately, it is
in fact over 17% of total loans (more than 464 trillion VND, equivalent to more than 23
billion U.S. dollars).
Vietnam's banking system is of large scale and rapid growth compared with GDP over
the years; in December 2007, the total assets of the banking system has only reached 80.5%


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of GDP, in December 2012 it has reached 184 , 7% of GDP; loans has increased
respectively compared with GDP from 63% to 101% of GDP.
+ Most of the capital in the banking sector owned by the Government, directly or
indirectly.
+ Banking system with a high degree of cross-ownership between banks and between
banks and businesses.
+ Vietnam banking system operating with low level of information transparency.
+ Separating the cross-ownership and investment process, borrowing and lending
among corporations owning banks or securities companies, insurance companies, finance
companies, finance leasing companies, the capital adequacy ratios ( CARs ) of a number of
banks have not met the minimum capital requirement of 9% .
+ There has been a high credit growth of 53.89 % in 2007 to 9.14 % in 2012 that has
created a shock to the industry, and causing a great impact on the high bad debts as well.
The high non performing loan in the construction resulting in many under progress’
construction projects being prolonged, low investment efficiency, the total debt to build this
based constructions are of about 100 trillion VND; difficulties in manufacturing, trading,

goods consumption; high inventory, securities market, real estate market declined sharply
and prolonged stagnation…
The lesson learnt from the fact
+ To ensure financial security for Vietnam’s monetary and baking market, firstly, must
determine and identify strategic roadmap publicly to regulate the macroeconomic policy ,
especially monetary and fiscal policy to be stable, strong, flexible, avoid any shock arise
(increase , decrease dramatically ) .
+ Develop the monetary and banking market in the direction of safety, efficiency,
binding strictly between domestic and international market, take gradual step towards a
transparent market operations, promote domestic capital in combination with oversea
fundings, towards meet the global standards to apply in Vietnam 's banking system to be full
compliance with Basel I, Basel II and Basel III’s principals .
+ Enhance the role of supervisory and inspection agencies of the monetary and
banking market, making the information regarding the supervision and inspection
transparency to create stabile and developing market pressure.
2.2.2. The factual financial security of Vietnam’s securities market, assessing,
identifying, causing and lesson learnt
2.2.2.1. The factual financial security of Vietnam securities market, assessing
High number of securities traded, however, the quality are low, the market products are not
variety yet.
+ About the investors:
The bases of investors are unstable due to lack of organized investors acting as a
foundation. The insurance companies have invested in the securities market as organized
investors but in a small-scale investments. The credit institutions involved in the securities
sector in the forms of bond investments, capital contributions to form securities trading
organization, investment trust, however, the risk management is still limited.
+ About arranging securities trading and services:
Numbers of organized trading securities but low scale and low financial capacity, not

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guarantee the performance, having potential systemic risk.
+ About organization markets:
The maintenance activities of the two stock exchanges have contributed to the
development of the securities market in recent years, but at present this has made the
securities market being divided.
The specifically bond market has been established and operated at the Hanoi Stock
Exchange, but mainly government bonds. The value of government bonds listed with more
than 160 trillion VND but there has been too many bonds.
2.2.2.2. Rating, comments on the financial security of Vietnam's securities market, the
causes and lessons
+ Vietnam stock market is a new and small market, the coordinating role and provides
medium and long-term capital for the economy is still limited.
+ Small root to form the securities market but underline the lossing financial insecurity
mainly because of weak economic, difficulties facing of enterprises, enterprise’s high bad
debts that led to an increase to record of bank loans in decades, high inventory, reduced
consumption, the frozen real estate market, the impact of the world economic crisis.
+ Lesson learnt from the operations of Vienam securities market:
The market should be developed stably, control strictly the standard to issue
enterprise’s bonds, stocks, make listed enterprise information more transparency comply
with the controllable standards, supervising the market in the direction of cooperating
supervise the money flows, supervise the monetary and banking market, securities market,
capital market by supervising the cooperated capital.
2.2.3. The reality of financial security for Vietnam's insurance market
2.2.3.1 . Status of financial security for the operation of the insurance market in Vietnam
By June 2013, among of 58 insurance companies and insurance brokerage business, therer
has been 29 of non-life insurance companies, 15 life insurance companies, 12 insurance
brokers, 02 reinsurance companies.
Overall compared with nearly 90 million people and GDP and compared with the financial
markets, the Vietnam insurance market is small (total assets of the insurance company by

the end of 2012 Vietnam has only reach 4% to GDP ) . The regulations on safety indicators
still sketchy, not fully meet international standards of governance, supervision of insurance
markets.
Currently, the insurance market is not been in any incident of insecurity, instability.
However, in the long term, to sustainable development Vietnam 's insurance market, it is
necessary to establish the financial security factor to ensure the stability, safety, standards
development and risk prevention of the market to avoid the impact of the crisis on the
financial mark prevention of the market to avoid any impact of the crisis on the financial
market.
2.2.3.2. Evaluation and assessment of financial security for Vietnam's
insurance market
+ Compared with 10 countries of Southeast Asia, by the end of 2011, Vietnam's economy is
6th, total insurance assets also at the 6th. At this point, the total assets is of about 4.2% of GDP and
equal to 1.9% of the total assets of the financial system in Vietnam, the total cost of life insurance and
non-life is of about 1.85% GDP and over 6 years, from 2007 to 2012, the growth rate over each year


15
were in double digits. The premium is low due to low per capita income and demographic
characteristics, but compared to other countries in the region such as Thailand, Indonesia, Malaysia,
Philippines, Vietnam has many potential development.
+ Thus, the Vietnam insurance market in its infancy, a small market compared to GDP and
financial system (compared with the total financial system, the assets over the years:
(2007:2,6%; 2008: 2.8%, 2009: 2.5%, 2010: 2.1% and 2011: 1.9%). The insurance activity
does not have a great effect on the Vietnam’s financial market. The insurance regulations
were initially formed and supervisory standards have been applied.
To develop sustainable insurance market, there should have in place policies to encourage,
promote as well as management mechanisms, appropriate supervision, to ensure market
development is secure, stable and avoid being affected by negative impacts.

CONCLUSION CHAPTER 2
In the process of international integration of Vietnam, financial market has developed
at quick scale and high speed. During the development of the monetary and banking market
the stability is not high yet, sustained inflation in years has created uncertainty for the macro
economy, many businesses have difficulties in production due to high interest rate of bank
loans, delinquency of banks tends to increase, some banks liquidity constraints, a number of
banks have merged or restructured with largest bank or there must be direct intervention of
the State Bank ... Especially in this context, economic difficulties, increase in bad debt of
banks are the causes of destabilizing markets and if it is not well handled, it will easily lead
to the crisis of monetary and banking market and will create crisis on the financial market in
Vietnam. About the structural characteristics of Vietnam's financial market, monetary and
banking market accounts for the majority of (always around 200% of GDP and nearly 90%
of the whole market)….
However, Vietnam’s monetary and banking market are basically not high stability in
operation, low security and difficulties in development, easy to be in a crisis due to an increase
in overdue debt of commercial banks. Vietnam's securities market have been developed since
2000, but there has been unstable in operations, unsafe and uneffective. The insurance market is
small, does not have much influence on financial markets. Regarding the government's public
debt, it has still maintained the level of safety and international standards on management of
Vietnam's public debt, thereby the financial markets has been stabilized. About implementing
measures on anti money laundering in particular and anti crime in general, it has not met all
international standard, therefore, Vietnam financial system is easy to be abused by criminals to
launder money and commit crime, therefore, create a great loss for the financial market.
Especially, at this time, Vietnam is in the public statement of FATF, the financial market
encounter with difficulties in conducting international financial transactions.

CHAPTER 3
SOLUTIONS FOR THE FINANCIAL SECURITY OF VIETNAM’S
FINANICAL MARKET IN THE INTERNATIONAL ECONOMIC
INTERGRATION CONTEXT

16
3.1. Orientation for Vietnam’s financial security of financial market in the
international economic integration context

3.1.1. Strategic orientation of financial market development
Synchronously developing markets, restructuring financial markets and financial
services and expand and diversify the forms of market activity to mobilize domestic
and foreign resources for economic and social development; Restructuring
commercial banking system Vietnam towards safe operation, stability and
development.
Focus on developing ssecurities markets to be stable, solid, efficient, safe in
operation, ensure the legitimate rights and interests of the participants in the market,
able to compete regionally, promote the development of the bond market including
government, local government bonds and corporate bonds.\
Develop the insurance market to meet with 90 million of populations, develop
different types of insurance.
3.1.2. Orientation of financial security of Vietnam financial market
Develop and full implement legal basis on the oriented market economy and
international integration of financial markets, including the legal basis of the
monetary and banking market, securities market and insurance market in 2015,
completing the plan of restructuring commercial bank system in Vietnam, ensuring
that 100% of Vietnam's commercial banks have reached the minimum equity to total
assets is 9%; the banks are standardized risk management to meet with Basel II
standards, banks have meet requirements on minimum risk include a full range of
risk, credit risk, market risk, liquidity risk, operational risk, reputation risks... All
commercial banks in Vietnam have to issue and the full implemented the provisions
on control and internal audit. All professional processes, business processes of the
commercial banks have to ensure to be adequate managed and independent in terms

of before, during and after implementation.
Fully develop market economy mechanisms for the integration of securities
markets and insurance markets. Encourage indirect foreign investment on Vietnam’s
securities market, insurance market, for example, can allow foreign investors to hold
up to 49% of enterprise, in special situation, can allow foreign strategic partners to
hold over 49% of enterprises even include securities companies, insurance companies
... However, there should be technical solutions, policies and strategies in place to
meet the principles of integration, but aslo minimize the massive withdrawal of
capital out of Vietnam market when there are adverse changes or crisis occurred.


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3.1.3. View point about financial security for Vietnam’s financial market
Two major views about financial security covering the financial market
development in Vietnam is:
+ Build and develop adequate financial markets: The safety, stability,
development and avoid the impact of the crisis and the impact of external direct
impact from the intrinsic economy for each participating organization into the market
and for the whole financial market system.
+ The Vietnam commercial banks are required to meet with Basel II standards
before 2015 and Basell III standard before 2020. Both the commercial banking
system Vietnam must achieve a minimum of risk management before 2015.
+ The non banking fnancial institutions including financial companies, and leasing
companies, all have to meet the criteria and standards of Vietnam’s governance,
management and control standards and the international standards, respectively.
+ Securities companies, insurance companies, fund management companies have
to meet the international norms and principles of Vietnam before 2015.
+ The financial organizations, commercial banks system, securities companies,
insurance companies must meet criteria to ensure financial security before 2015, namely:
• The indicator reflecting financial security for monetary and banking market

including capital adequacy ratio, credit margin to ensure financial security,
affordability ratio to guarantee financial security, limited capital contribution,
share purchase, the ratio of credit to total mobilized capital, overdue debt to total
debt, the rate of profits, the evaluation index endurance of the credit institution
shocks in financial markets
• The indicators reflect the financial security for financial institutions
participating securities market, include: the safety index by Basel I and Basel II,
the indicators of self financing, indicators net capital to meet liquidity.
• The indicator reflecting financial security for financial institutions
insurance market participants, including: co-solvency margin, the total minimum
capital.
Enhance capacity and effective monitoring, inspecting financial markets,
towards full application of international standards on the the principles of
respecting market rules.
In the short and medium term, financial markets need to address these two
fundamental issues:
+ Measures to address the outstanding loans over the years to bring back the bad
loans at safe level for the entire financial system and for each financial institution and
ensure effective.
Ensure new invested financial flows in the economy contributed to economic
growth and create effective and positive impact on the process of consolidation and
restructuring for the whole the financial system and for each financial institution


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(banking, securities, insurance ...).
3.2. Solutions to ensure the financial security for the operations of the Vietnam’s
financial market in the international economic integration context
3.2.1. Ensure the financial security for the operations of the Vietnam’s monetary and
banking market in the process of international economic integration.

Develop and promulgate monetary policy which is stable, highly concentrated
targeting at controlling inflation, stabilizing the currency value.
To improve the stability and operational safety of monetary and banking markets, it is
necessary to build and improve a number of key measures of macroeconomic stabilization
policies.
+ State Bank of Vietnam issued regulations on minimum risk and require credit
institutions and organizations to implement and conduct strictly supervision.
+ State Bank of Vietnam issue policies to encourage joint-stock banks to seek develop
foreign strategic partner to increase the financial capability and application of modern
technology, and management experience in operating risk management.
+ Group of measures to improve the financial capability:
Request credit institutions to meet capital adequacy ratio at least of 9 % of the own capital
to total assets which has been adjusted the risk of credit institutions (capital adequacy ratio
separately) .
+ Group strengthening the leading role of state-owned commercial banks :
Continue reform, innovation state-owned commercial banks , such as ;
+ Solutions to create a favorable environment for banking operations:
Complete appropriate system mechanisms and policies to facilitate the efficient operations
of commercial banks.
+ Limit the opening in massive of commercial banks branches, particularly in areas where
have been “density of braches", priority to develop branches in disadvantaged areas,
undeveloped.
+ Innovate the supervision of banking and non financial institutions based on modern
technology and international practices in line with the real situation in Vietnam, including:
* Develop processes, content and technology applications in micro-monitoring activities.
* Develop processes, content and application of modern information technology in monitoring
system of macro-credit institutions.
* Develop information technology systems rating credit institutions in accordance with Camels
* Develop information systems technology to analyze and build different warring and arlert
system for each credit institution to have policies and timely measures to avoid affecting the entire

system .
* Develop processes, systems, and application of information technology to manage
supervision programs, combined between onsite and offsite supervision
+ Change from planned inspections of any specific cases, branches into legal
inspections to evaluate in general, risk management, safety level of a credit insititution.
The system of internal control is established by the executive committee through the
operational procedures to ensure the transactions are fully calculated, guaranteed
transactions risks are appropriately considered and ensure that policy and strategy
developed by the board is respected .


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To ensure financial security for Vietnam forex market, a specific solution is to have in
place the policies to stable the exchange rate to encourage exports to attract foreign
currencies, encourage foreign investment, encouraging policy to expand remittance services,
state policies on foreign exchange and foreign exchange risk management, policies on
foreign exchange risk applies to banks, financial non banking institutions. Restriction to
gradually end its mobilization and lending in foreign currencies, switch into exchange
trading mechanism .
For safety management, effective investment of country’s foreign exchange reserves,
to determine the structure of a reasonable reserve in accordance with the balance of import
and export, the balance of funds related to the strong currency easily in conversion such as
the U.S. dollar, EU dollar, UK pound, Japanese Yen area ... identify and accurately calculate
the portfolio, the largest bank with eligible standard, central bank and government bonds
with high- ranking in order to avoid the risk of irrecoverable and hedging fluctuations of
exchange rates of currencies .
In summary: key measures to ensure financial security for the operation of the
monetary and banking market in Vietnam in the international economic integration context
requires the following solution: improve the stability and operational safety all of the three
market (first market, second marke, thrid market) .

+ In addition to the measures mentioned above, at present and in the long term,
effective solutions to handle bad debt and limit bad debt increases in the credit system in the
future very important to ensure financial security for Vietnam financial market today and in
long term.
In general: “Ensure the financial security for the operations of Vietnam’s monetary
and banking system in the international economic integration context” means ensuring the
stability, safety and development of the market. In the opening market economy, monetary
and baking market has international characteristic in terms of the continuity and high impact
among credit institutions. Therefore, the solution to ensure financial security for the
operation of monetary and banking markets must meet the stability, security and
development for each credit institution and for credit institutions system as a whole.
The main measures to ensure financial security for the operation of the monetary and
banking market in Vietnam in the international economic integration context, such as:
developing and issuing monetary macro stability policy, forming and implementation of
security policies in the operations of the credit institution; improve the efficiency of the
inspection and supervision of credit institutions and enhance risk management in the credit
activities of organization's, solving any abnormal activity of credit institutions, preventing
and combating banking criminals, develop linking solutions, build and implement solutions
to improve the stability and operational safety of monetary and inter-banking market
(second market) and the third monetary and banking market.
In addition, the portfolio of banks, financial institutions and non-banking institutions
in other banks should have to be regulated on managing and close monitored to ensure all
portfolios of banks, the financial non-bank institutions should have in place investment and
monitor regulations. Especially at present, high overdue debts, bad debt settlement is of
important solution to make overdue safe level less than 3% of total loans.
3.2.2. Some main solutions to ensure the financial security for the operations of


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Vietnam’s securities market in the international economic integration context

+ Develop and implement stable and developing macroeconomic policies:
In short, developing and implementing macroeconomic policies to develop and stable
macroeconomy, stable the society and security for Vietnam as the most important solution
to make the operation of the stock market our country's stability and development.
+ Develop, promulgate the implementation of laws, the securities and the securities
market in Vietnam.
+ Establish securities market regulation to fully regulate the release, circulation,
control, monitoring market.
+ Form regulations on the management and supervision of the secondary market in
Vietnam (as of the market between buyers and sellers of securities have been issued in
the primary market).
+ In every country there are policies to encourage development of the securities
market in particular. In Vietnam it is necessary to focus on tax policies to encourage
market development.
+ Increased real demand for the stock is considered as a main financial asset in
order to create the kind of stocks and bonds that can be traded, pledge to hold short and
long term, high liquidity as the other financial property under the law.
Thus, to develop and stabilize Vietnam's securities market, the State should have
appropriate tax policies to encourage the development of the securities market, creating
favorable conditions for a legal basis to encourage activities of trading, pledging,
liquidating, settlement, custody of qualified securities into financial assets easily and
conveniently.
+ Any developing country the securities markets are also required to develop and
complete the stock legal framework, the system of monitoring the stock market.
Complete the legal basis for monitoring the Vietnam stock market.
+ Develop technical infrastructure investment to ensure that high-tech surveillance
since the stage of issuance, circulation and settlement, depository, underwritten
securities.
+ Structuring goods in stock market towards improving the quality of issuance,
listing and registration transactions and develop new quality of goods for the stock

market, raising the criteria for listing securities, especially criteria on profitability,
timeline for operations and corporate governance in accordance with international
standard and practices under the criteria for market structure; improve corporate
governance mechanisms
Restructuring the investor towards diversify the investors basis, open the organized
and professional investors basis, establish the framework to allow the establishment and
operations of securities companies.
+ Classification of securities business organizations to implement restructuring to suit
each group.
3.2.3. Financial security for the insurance sector in Vietnam
+ Establish the mechanisms and policies on doing business in insurance to be full ,
transparent , fair and consistent, facilitate of market development, full implement of
international commitments.


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+ Impove the safety operational efficiency and competitiveness of the systems,
develop insurance companies to be strong in finance, management capability, operating to
meet with international standards, efficient in operation, create ability to compete on the
domestic market as well as the region.
+ Encourage and support the diversification of business insurance products to meet the
diverse insurance needs of organizations and individuals.
+ Diversification and establishment standards for brokerage agencies, insurance
agencies to create an effective bridge between the insurer and the customer.
+ Build process of monitoring and inspection, professional management and insurance
management, insurance supervision to ensure principles of management and supervision of
insurance.
3.2.4. Some solutions to ensure the financial security for the national
debt in Vietnam
3.2.4.1. Enhance the effectives of public debt

3.2.4.2. Control strictly the rate of public debt
3.2.4.3. Improve revenues, foreign currency reserves to increase the ability of repayment of
the economy
3.2.4.4. Develop a plan based on the public debt in line with economic social development
plans, revenue and spending plans, the state budget in each period, time, publicity,
transparency and clear responsibilities in explaining the management of public debt
3.2.5. Solutions to enhance the anti money laundering activities to ensure the Vietnam’s
financial security in the international economic integration context
3.2.5.1. Fulfill the legal framework to meet with domestic and international requirements
a) Enact the Law on Anti Money Laundering and amend the Penal Code to meet with
domestic and international standards
b) Establish and issue legal documents on anti money laundering to stipulated in
details the law on Anti Money Laundering
3.2.5.2 Improve and enhance the operations of institutions responsible for anti money
laundering include banks, financial institutions, financial leasing companies, securities
companies, insurance companies.
3.2.5.3. Increase domestic cooperation in anti money laundering
3.2.5.4. Increase international cooperation on anti money laundering
3.2.6. Recommendations to the National Assembly, Government,
Prime Minister, and ministries, agencies.
*)For the National Assembly: Passage the supplement of the Penal Code with articles
related to anti money laundering, criminal liability of legal person, issue regulations on
identifying customers and customer due diligence responsibilities soon to meet with
international standard.
*)For the government:
• Direct ministries, agencies to have drastic solution to deploy bad debts; direct the
implementation of policies with high unity, efficiency and safety ;
• Direct the implementation of decrees and regulations issued by the asset
management company to assist the deploy bad debts; run effective the operations of the

22
company, well-supported banks for processing loan, sale of assets.
• Increased synchronization solution both monetary and fiscal policy to support
enterprises to quickly get out of recession.
• Amend the decree on issuing corporate bonds to be more strictly in principles and
conditions (the current regulations require profit per year, however, it should be raise up 3
consecutive years of profit of newly issued bonds) .
• Develop and approve, implement soon the project against dollarization towards
shifting the relationship between credit institutions and private organizations and businesses
from borrowing foreign currencies into trading one.
• Accelerate the equitization of State enterprises
*)For the Prime Minister:
• Decision on the reestablishment of Banking Supervisory Agency in the direction of
more consistency from the central level to the local level.
• Issuing the decision on the cooperation of Banking Supervisory Agency and State
Securities Committee, General Department of Insurance Supervision and Management.
• Increase the role of the National Steering Committee on Anti Money Laundering to direct
ministries and agencies to issue their own plan to implement the National Action Plan of the
Government in 2011, 2012 and the following years.
• Direct the ministries, agencies to issue the detailed guiding documents under their
power on anti money laundering, increase the supervision on anti money laundering. The
Supreme People Procuracy, the related ministries and agencies increase international
cooperation on anti crime in general and anti money laundering criminals in particular.
*) For the State Bank of Vietnam:
- Fulfill the drafting and submit to issue soon the legal documents include Decree and
Circular to implement the Anti Money Laundering Law, submit to the Government for
approval.
- Strengthening the organizational structure, upgrade the infrastructure of the information
technology system of the Anti Money Laundering Department to increase the capapcity of supervise

the money flows.
- Conduct the regular supervisory and inspection of credit institutions on anti money
laundering.
- Increase international cooperation on anti money laundering.
- Enhance the supervisory functions to conduct supervison on credit institutions, increase
the transparency of the banking supervision activities.
*) For Ministries and agencies:
+ Increase the information exchange, cooperation with State Bank of Vietnam
regarding the inspections, supervision, investigation and prosecution on predicate offence
and money laundering offence.
+ For credit institutions, securities and insurance companies, real estate companies,
reporting institutions have to improve the customer information update, customer
identification, customer due dilligence, invest technology … to meet with the regulations of
the State Bank of Vietnam.


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CONCLUSION OF CHAPTER 3
Overall orientation and basic solutions to ensure the Vietnam's financial system to be
safe, stable operations, develop and avoid the impact of the domestic and oversea crisis,
means:
Building a healthy national finances, make sure to maintain financial security, stable
macroeconomy, monetary financing, facilitating economic growth associated with the
renewal and re-growth model economic structure, solving the problems of social security,
mobilization, management, delivery financial resources of the society efficiently, fair,
conduct administrative reform consistently to ensure the efficiency and effectiveness of
management, financial supervision.
In the short and the long term, financial markets need to address two fundamental
issues: recommend solutions to handle with large NPLs that existed for many years

(about 17% of the total outstanding loans of banking system) and solutions to promote
the new financial flows to invest in the economy to support business stability,
contributing to the development of economic growth.
The specific measures to ensure the security of Vietnam's monetary and banking
markets, securities market and insurance market to enhance safety of the national debt,
the solutions to improve the efficient of anti money laundering activities to ensure
financial security of Vietnam in the international economic integration context.
These are the fundamental solution apply for each market, each region and solutions to
support the financial markets. To achieve financial security for the entire financial market of
Vietnam, the solution must provide high uniformity, coherence in the single market that is
the Vietnam’s financial market which has the impact and influence in the integration and
articulation with the international financial markets.

CONCLUSION
In the globalization process , Vietnam has integrated deeply in every field , particularly
in the economic integration. Vietnam is a country with a very open economy, average total
of exports from 2007 to the present have been more than 1.5 times of the GDP . However,
during the integration, the payment flows between countries and Vietnam have been
increased dramatically, such as import and export payments , direct and indirect
investment ... together with the rise of international trade are the negative effects of
globalization , such as the economic crisis, the financial, banking crisis have a negative
impact on the economy of Vietnam. Accompanied is the increase in global crime, especially
crimes often take advantage of the operations of financial institutions and banks in the
developing country where there has been lack of strict control mechanisms so that they can
perform criminal activities, money laundering activities
To avoid damage to the economy, to create the conditions for the financial system,
banks to oparete more efficiently, minimize risk, create chance for financial markets to
operate safely, efficiently, Vietnam needs to build the solution to ensure financial security
for the operation of financial markets:

24
+ The solutions to ensure the security for the monetary and banking market in Vietnam
establishment, issued monetary stabilization policy, build and implement safety policies
regarding the operations of financial institutions, improve the efficiency of the inspection
and supervision of credit institutions and enhance risk management in the operation of
credit institutions ; handling the abnormal activity of credit institutions; solving the NPLs to
ensure that in the year 2015 bad debt credit institutions throughout Vietnam will be less than
5%; prevention and fight against organized crime in the credit institutions, forming the
network solutions, building and enhanced the stability in the operation of the interbank
market, market between credit institutions and central banks, manage and montor the
portfolio of credit institutions.
+ Strengthening the financial security solutions for the securities market, such as
establishment and implementation of macroeconomic policies; develop, issue and supervise
the implementation of the legal framework on implementing the law on securities and
Vietnam's securities market, the major solution to develop the supervision of the
participants in the securities market, the major solutions to develop the monitoring systems
of the securities market, the transparency and control information mechanism relating to the
securities market, the solutions to increase the quality of products for the securities
market…
+ Strengthening measurers to ensure the financial security for government debt
include: increase the efficiency of public investment, increased control growth of public
debt, improve revenues, improving the foreign exchange reserves to increase the solvency
of the economy, debt repayment plan, transparency to control public debt.
+ Increase the efficiency of anti money laundering activities, anti criminal activities in
the international economic integration context include: fulfill the legal framework to meet
with domestic and international requirements; fulfill and improve the efficient operations of
organizations responsible for anti money laundering; increase domestic among ministries
and agencies on anti money laundering; increase international cooperation on anti money
laundering, prevention global crime.

The synchronous solution of financial security for Vietnam's financial market should
be conducted to meet the standard of quality and quantity, to ensure the appropriate
cooperation of different market to make these market operate consistently within the
financial markets.