State Bank of Vietnam learns from Australian experience
(23 March 2005 – Australia/Vietnam) A delegation from the State Bank of Vietnam has been in Australia on a fact finding tour as the country prepares to liberalise its banking system and begin talks on joining the World Trade Organisation.
The delegation was in Australia as part of an AusAID funded project entitled Technical Assistance for Formulating the Strategy on International Integration in the Banking Sector. The group was advised and assisted by consulting firm Erskinomics managing director and BRW magazine columnist Alex Erskine.
As things currently stand, the vast majority of Vietnam’s commercial banks are state owned with very little foreign participation. There are some 30 smaller, partly private banks operating in the country with the largest of these, Saigon Thuong Tin Commercial Bank announcing this week that it would be the first bank in Vietnam to list on the country’s stock exchange later this year.
Vietnam’s bilateral trade agreement with the US means the country must allow US banks to enter the domestic banking sector. Membership of the WTO would mean this commitment would be extended to banks from other countries.
While in Australia, the team from the State Bank, led by deputy governor Dr Phung Khac Ke, met with regulators Reserve Bank of Australia, Australian Prudential Regulation Authority, Australian Securities & Investments Commission, the Australian Stock Exchange, other government bodies and unions.
The delegation also met with Commonwealth Bank to learn about its experiences of moving from public to private ownership. St George Bank addressed the team on how it has succeeded in the face of competition from both Australia’s Big Four commercial banks and international banks entering the markets.
East & Partners provided the group with an overview of Australia’s highly competitive banking environment.
Dr Ke told Banking News that the Australian visit had been extremely useful and that the group would take back valuable information it could apply during what he described as a "critical period" in Vietnam’s banking history.
"We’ve found these few days in Australia to be a useful learning experience as we start to get our domestic banks ready for competition," Dr Ke said.
He said the State Bank had set out a roadmap with the aim of opening up the market to competition and being in a position to begin serious negotiations with the WTO by the end of 2005.
Dr Ke said he’d been particularly impressed by the level of regulation of Australia’s banking and financial services sectors, with three separate independent organisations – RBA, APRA and ASIC – all regulating the system.
He also said the delegation had learnt a great deal about the impact and implications of foreign bank participation, which was not subject to regulation, on the local market.
As things currently stand, the vast majority of Vietnam’s commercial banks are state owned with very little foreign participation. There are some 30 smaller, partly private banks operating in the country with the largest of these, Saigon Thuong Tin Commercial Bank announcing this week that it would be the first bank in Vietnam to list on the country’s stock exchange later this year.
Vietnam’s bilateral trade agreement with the US means the country must allow US banks to enter the domestic banking sector. Membership of the WTO would mean this commitment would be extended to banks from other countries.
While in Australia, the team from the State Bank, led by deputy governor Dr Phung Khac Ke, met with regulators Reserve Bank of Australia, Australian Prudential Regulation Authority, Australian Securities & Investments Commission, the Australian Stock Exchange, other government bodies and unions.
The delegation also met with Commonwealth Bank to learn about its experiences of moving from public to private ownership. St George Bank addressed the team on how it has succeeded in the face of competition from both Australia’s Big Four commercial banks and international banks entering the markets.
East & Partners provided the group with an overview of Australia’s highly competitive banking environment.
Dr Ke told Banking News that the Australian visit had been extremely useful and that the group would take back valuable information it could apply during what he described as a "critical period" in Vietnam’s banking history.
"We’ve found these few days in Australia to be a useful learning experience as we start to get our domestic banks ready for competition," Dr Ke said.
He said the State Bank had set out a roadmap with the aim of opening up the market to competition and being in a position to begin serious negotiations with the WTO by the end of 2005.
Dr Ke said he’d been particularly impressed by the level of regulation of Australia’s banking and financial services sectors, with three separate independent organisations – RBA, APRA and ASIC – all regulating the system.
He also said the delegation had learnt a great deal about the impact and implications of foreign bank participation, which was not subject to regulation, on the local market.
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