1 International Conference on Enhancing the Effectiveness of Deposit Insurance Operation, Hanoi...

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1 International Conference on Enhancing the Effectiveness of Deposit Insurance Operation, Hanoi March, 2007 ENHANCING THE EFFECTIVENESS OF THE FINANCIAL SUPERVISORY SYSTEM OF VIETNAM Pham Phan Dung General Director Banking and Financial Institutions Dept. Ministry of Finance, Vietnam

Transcript of 1 International Conference on Enhancing the Effectiveness of Deposit Insurance Operation, Hanoi...

Page 1: 1 International Conference on Enhancing the Effectiveness of Deposit Insurance Operation, Hanoi March, 2007 ENHANCING THE EFFECTIVENESS OF THE FINANCIAL.

1 International Conference on Enhancing the Effectiveness of Deposit Insurance Operation, Hanoi March, 2007

ENHANCING THE EFFECTIVENESS OF THE FINANCIAL SUPERVISORY

SYSTEM OF VIETNAM

ENHANCING THE EFFECTIVENESS OF THE FINANCIAL SUPERVISORY

SYSTEM OF VIETNAM

Pham Phan Dung

General Director

Banking and Financial Institutions Dept.

Ministry of Finance, Vietnam

Pham Phan Dung

General Director

Banking and Financial Institutions Dept.

Ministry of Finance, Vietnam

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CONTENT

Part I: The necessity to improve the financial

supervision system capacity in Vietnam

Part II: Orientation of determining the

supervision model of the financial

system in Vietnam

Part III: Roles and functions of DIV in the

national financial supervision system

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CONTENT

Part I: The necessity to improve the financial supervision system capacity in Vietnam

1.1 Introduction on the current supervision operation of the financial system in Vietnam

1.2 The fast moving financial market

1.3 Requirement of developing a market economy with Socialist orientation

1.4 The necessity to renovate supervision operation in accordance with international standards

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1.1 Introduction on the current supervision operation of the financial system in Vietnam

• Supervision agency operates as policy maker and license

issuer

• A financial institution is subject to more than one supervision

agency

• Each supervision agency only functions in designated area

• Lack of cooperation between supervision agency

Lack of transparency, less effectiveness on overall supervision and early warning, creating burden to financial institutions

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1.2 The fast moving financial market

• The Trend of mobilizing fund via financial market

• Increase of systemic risk and effect to the

national economy

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1.3 Requirement of developing a market economy with Socialist orientation

• The commitment of the Government of Vietnam in the renovation process toward market economy

• Renovating principles: State Management based on the law and regulation system. The economy develop under market disciplines

• Continuing and unique policy: avoid overlapping, clear cut between responsibility of policy maker and supervisory function

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1.4 The necessity to renovate supervision operation in accordance with international standards

• The effectiveness of consolidate supervision system

• The trend of establishing consolidate supervision system in economic transformed countries and countries effected by the financial crisis

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Contents

Part II: Orientation of determining the supervision model of the financial system in Vietnam

2.1 Government Orientation

2.2 Types of financial supervision agency

2.3 Determine mandate and function of financial supervision agencies in Vietnam

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2.1 Government Orientation

• Enhancing the effectiveness of financial market supervision, focus on the interaction between the monetary market and capital market

• Set up an appropriate supervisory mechanism

• Establish a general financial market supervision agency

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2.2 Types of financial supervision agencies

Centralized model:

Japan

Korea

U.K

Diversified model:

China

Australia

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Issuing license

Mandate&

Function

Determine process & Standards

Supervision and examination

Enforcement of violations and claims settlement

Maintain the stability of financial market

1- Maintain the stability and

sustainable development of

the financial market

2- Protect the interest of

market players

1- Maintain the stability and

sustainable development of

the financial market

2- Protect the interest of

market players

Objectives

2.3 Determine mandate and function of financial supervision agencies in Vietnam

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CONTENTS

Part III Roles and functions of DIV in the national financial supervision system

3.1 Function and position of DIV in the financial supervision system

3.2 Comments on the development of DIV

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3.1 Roles and functions of DIV in the national financial supervision system

• DIV is a component of the financial market and national financial supervision system

• Right to carry out examination of DIV

• Right to carry out supervision of DIV

• Mobilizing fund for claim payment

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3.2 Comment on strategic development of DIV

• DIV to clearly determine the role and function in the national supervision system

• Propose the Government to formulate the Law on Deposit Insurance

• Improve the organizational structure, human resource and financial capacity

• Diversify services and products, modernizing operation

Best protect depositors, contribute to maintain the stability of the financial system in accordance with international standards

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Thank You !Thank You !

[email protected]@mof.gov.vn