Abstract
This paper enlightens the main features of ASEAN Banking Integration Framework (ABIF) and the requirements for Qualified ASEAN Banks (QABs). Using Moody’s evaluation method and Bankscope database for banking systems in 7 ASEAN countries, the paper compares Vietnamese banking system with the rest of the region on asset quality, capital adequacy, profitability and liquidity aspects. The results show that Vietnamese banks are relatively low-developing, and will face fierce competition from foreign banks on their home market. Measuring the effects of integration appears essential for the regulators and banks in seeking appropriate and prompt solutions to these challenges and in seizing valuable opportunities to obtain sustainable and efficient development.
Highlights
Assessment of Vietnamese Banking System in the RegionAs a member of ASEAN since 1995, Vietnam has shown its active role in promoting the regional development in general, and the economic integration in particular
This paper enlightens the main features of ASEAN Banking Integration Framework (ABIF) and the requirements for Qualified ASEAN Banks (QABs)
ASEAN Economic Community (AEC) tends to advance the economic linkages among ASEAN states, including route to the economic integration
Summary
As a member of ASEAN since 1995, Vietnam has shown its active role in promoting the regional development in general, and the economic integration in particular. The WTO accession process, the participation in FTAs and most recently the participation in AEC and TPP has opened many opportunities and challenges for Vietnamese banking system. Have to compete with banks from countries in region, Vietnamese banks have an interest in expanding their operations to neighbouring countries. The authors use the Moody’s evaluation method to conduct a comparison of the operation of Vietnamese banking system with other ASEAN countries. A key variable is selected to reflect the real state of the banks, and a few additional criteria are selected to provide further analysis of their situation. To compare the operation of Vietnamese banking system with others in ASEAN region, Bankscope database spanning from 2010 to 2014 is used.
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