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Abstract:
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This paper looks at the development of the financial systems of ASEAN-5 countries and
Vietnam. By making a comparison between factors that foster the financial development of
ASEAN-5 and Vietnam, it suggests that both the two sides share common characteristics
including: financial repression, bank based development, accelerating liberalization of the
financial sector, capital movement, inefficiency, due to lack of competition, effective governance,
and managerial freedom. The health of financial system of the ASEAN-5 has improved
substantially during the period post 1997-98, with increase in foreign ownership, movement into
business line, suitable adjustment for financial deepening and broadening. On the Vietnamese side,
it shows rapid changes in the financial sectors with existence of capital market and financial
resources as well as risks, resulting from the reforms and international integration. Contrasting the
financial development of the two sides, this paper finds that ASEAN-5 is implementing a more
stable strategies and moving towards a more balanced financial structure, while Vietnam is taking
step by step restructuring and developing its out of date banking sector; as well as supporting for
the stock and bond markets. For both Vietnam and ASEAN-5, the banking system and capital
market have a large room for further development. |