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Trillion dollar bad-debt solution proposed for Vietnam

Trillion dollar bad-debt solution proposed for Vietnam

(24 October 2012 – Vietnam) As a solution for bad debts, Vietnam is seriously considering setting up an asset management company (AMC) capitalised at US$4.8 trillion (A$4.6 trillion). The trillion dollar solution is necessary because the country’s banks will need to pay some US$1.4 trillion annually to pay off its bad debts by 2015.

The State Bank of Vietnam believes that it is necessary to set up an AMC as a subsidiary or a part of a commercial bank.

An AMC can help avoid a possible collapse of the banking system while simultaneously putting pressure on banks to restructure.

Some economists have criticised the plan, believing it is not up to the government to set up a bad debts corporation, instead they should leave it to the commercial bank sector.
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