A Study on Vietnam Banking Restructuring: Comparison between before and after 2011

Abstract

The banking sector is always an important part of any economy. Therefore, it is necessary for every country to develop and maintain a good banking sector to support not only the economy but also the society. After more than two decades of experiencing the rapid growth, Vietnamese economy in general and banking sector in particular has been facing problems: high inflation and declining growth rate, boom and bust in real estate sector, high inefficiency in state investment and state-owned economic groups, growing bad debts and banking instability, high interest rate and massive bankruptcy in private sector. As a respond to urgency of this matter, the Vietnamese government announced a program for banking restructuring called Decision 254 in 2011. This study gives the background of Vietnam Banking sector, the current problems the sector has been facing. It then analyzes the banking restructuring progress after Governments Decision no. 254 was adopted and compares efforts and results of this new restructuring program with previous ones on Vietnam banking reform and restructuring.