3.2 Financial system
3.2.1
Banking system
Financial liberalization in Vietnam have speed up from the early of the 1990-s, the banking system in Vietnam particularly and the financial system in generally has achieved a lot of progress. These twenty years of progress have proved that, the banking system has been transferring from a one-tier system into a two-tier system which allowed all households to compete fairly and effectively. In 1990 two important Decrees were announced. First was the Decree on the State Bank of Vietnam (SBV) and the second one was the Decree on Banks, Credit cooperative and financial companies. Actually these decrees in fact divided the Vietnamese financial system from monopoly (or one-tier) system into two-tier system, in which SBV now mainly acted as a central bank, while other banks and financial companies can have independently freedom to be established, acted and even closed. Improvements in banking sector are mainly derived from cooperative activities and initiatives of IMF and WTO via Vietnamese government. Since 1991 the number of state-owned commercial banks (SOB) in Vietnam went up by one unit reaching 5 SOB-s in 2010. As a result of signed decrees which were mentioned above, in 1991-2013 the number of operating joint-stock commercial banks (JSB) raised to 39 while in early 1990-s there was only 4 JSB-s on average. On the other hand Vietnamese banking system by 2013 have experienced high increase in the number of established joint-venture banks which in its turn means the lowered rate of government intervention to financial venture establishment. The crucial changes in terms of independent multilateral structuring and injections of foreign financial institutions have pledged in Vietnam since 200...
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...ing sector was around 1,800 trillion VND () during 1995-2010 period.
• Present inflation rate of the VND is about 6.8%.
• One stock exchange, established in July 2000 in Ho Chi Minh City.
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Encouragingly Jordan’s banking sector managed to weather the crisis better than other sector of the economy, and other banking sector in different countries. This was mainly supported by rather conservative policies and tight regulations. For instance banks in this country are pure universal. This implies there is no pure investment bank that relies entirely on investment income, a factor that majo...
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Paulo Freire compares two concepts of education, “banking” and “problem-posing”. In banking teachers assume students are passive, take all control, determine what will be learned, and "force-feed" information to students. In problem-posing, students and teachers carry on a dialogue to teach one another. Students are therefore active, becoming empowered to criticize the world and so change it.
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Commercial banks are the most important savings, mobilization and financial resource allocation institutions. Consequently, these roles make them an important phenomenon in economic growth and development. In performing this role, it must be realized that banks have the potential, scope and prospects for mobilizing financial resources and allocating them to productive investments (Olokoyo , 2011). The importance of efficient financial system is mostly felt in developing countries since their financial markets are underdeveloped and not strong thus banks plays a crucial role of integrating the whole economic sector of a country by serving as a vital source of finance for the enterprises (Ntow–Gyamfi
Banking is a process that is involved in many ways with the business and trade. There are different types of banking in the present world. Two major types are the Conventional Banking and the Islamic Banking. Both of the banking systems are playing very important roles in the trade and business. The focus in this discussion is an evaluation about these two banking system. The chapters will address important bank characteristics that will be included in the regression models. The Ordinary Least Square method will be used to identify how bank characteristics impact bank profitability. The adopted methodology examines the sensitivity of internal bank characteristics on profitability indicators. The profitability study is conducted on Islamic banking system and is compared to conventional banking system. The discussion begins with a literature review and moves on to the critical evaluation and analysis, variable definition, model, and data variables, advantages, disadvantages, points agreed with, points disagreed, reasons, and evidence.
... of private banks. Therefore, well- connected industrialists may have superior ability to attract loans or equity from development banks, even in cases where they would be able to get capital elsewhere (Ades and Di Tella, 1997; Haber, 2002; Krueger, 1990). However, La Porta, et al., (2002) document that government ownership of banks is associated with lower subsequent economic growth and argues that politicians use government – owned banks to further their own political goals. Good governance plays an important role in preventing government interference in credit decisions, as it differentiate between the rights and responsibilities of the different stakeholders of the DB. In order to achieve efficiency, the bank need to be organized as firm, with shareholders, board of directors and management. The accountability of each of these groups needs to be clearly stated.
Asian financial crisis in 1997 is a good example to demonstrate the globalisation as a single issue in one country will motivate a domino effect on other countries. Since the crisis stared in Thailand because of the fail in banking system, a political upheaval was triggered in South Korea and Indonesia. At the same time, financial centres in New York, London, Hong Kong and Tokyo were also affected in this crisis. During the crisis, global news agencies utilised the Internet and telegraph updating news to their home countries. Such as the Economist, Reuters and the Financial Times which ar...
In the majority of developing countries, banking is the most important part of the financial system, facilitating domestic and international payments, functioning as the intermediary for depositors and borrowers, and providing financially related services. For this reason, the banking system is considered the main target of the majority of laundering operations. The key role of the banking system for the money laundering is undoubtful, given that banks provide services functioning as vehicle for the introduction of illicit money into the financial system. Money derived from illegal activities can be entered into the global financial structure by the use of bank bearer instrument, for example bank drafts, telegraphic transfers or the fragmentation of the entire amount of illicit
Never have I ever climbed a mountain peak. As a child, I imagined myself conducting expeditions in deep-frozen pathways, leading amateur explorers to the top of the world, and instructing rookies in surviving harsh blizzards. Even though slightly altered, my childhood dream has been achieved. I led a team of fellow classmates, in my Strategic Management course, to the success summit of a financial competition. Over the course of a semester, I and my teammates were supposed to create and manage a company of the IT industry, in a computer-simulated environment, along with other four rival teams. I dealt with strategy and financial matters of our virtual enterprise, while my colleagues were working on marketing and manufacturing. During the four months of the exercise, I have experienced finance from various aspects: capital budgeting, through selecting favorable investment for upcoming quarters; debt management, by assessing the necessary amount and efficiency of loans; profitability analysis and dividend policy, which had been used to compile the company’s general performance index. Working in a multinational team, which included an American, a Norwegian and a Moldovan, strengthen my negotiations skills, as well as flexibility and cooperation. But above all, this experience intensified my passion for finance. Of course, a pleasant bonus was the fact that, in the end, our company’s financial performance was six times the performance of second-best team.
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.
At the same time, the amount of non-performing loan ratio has also increased from 1.9% in 2015 to 2.4% in 2016 that requires banking institutions to pay more attention and to raise caution on risky sectors in order to strengthen the effectiveness of assets quality management (Supervision Annual Report, 2016). This can be resulted from the lack of sufficient legal framework for the institution governance and its operation monitoring. Therefore, this has brought the central bank to pay more attention to the performance of the banking and financial institutions in order to avoid the bankruptcy. To deal with the doubt concerned, there are few questions the study is going to figure out what are the problems of the banking supervision at the National Bank of Cambodia and how the central bank do to manage this issues.