Seminar on experience in Basel II Advance Measurement Approach (AMA) implementation and moving toward Basel III

Attending the seminar, there was Mr. Pham Thanh Ha, SBV Deputy Governor, Ms. Carolyn Turk, WB Country Director for Vietnam, together with representatives from the Government Office, the Economic Committee of the National Assembly, as well as several relevant Ministries and Government agencies, and international experts.

In Vietnam, the implementation of Basel II Capital Standards has achieved encouraging results, specifically as follows:

The SBV has issued Circular No. 41/2016/TT-NHNN dated December 30, 2016 stipulating the capital adequacy ratio for banks and foreign bank branches (Circular 41), which provides guidance for Pillar I (based on the standard method) and Pillar III of Basel II Capital Standards. Currently, 86% of the commercial banks and the foreign bank branches have applied the capital adequacy ratio in line with Circular 41, and by January 2023, the remaining commercial banks and foreign bank branches will also apply the capital adequacy ratio as determined by Circular 41.

The SBV has issued Circular No. 13/2018/TT-NHNN dated May 18, 2018 stipulating the internal control system of commercial banks and foreign bank branches (Circular 13), which provides guidance for Pillar II (the Internal Capital Adequacy Assessment Process - ICAAP) of Basel II Capital Standards for the banks to implement from January 2021.

With the full implementation of the pillars of Basel II Capital Standards in accordance with the Circulars of the SBV, Vietnamese banks have significantly improved their financial soundness, enhanced their risk management capacity, and contributed to strengthening the resilience of the economy to shocks, such as the COVID-19 pandemic, or any negative developments, or external uncertainties like those that have taken place in recent months.

Overview of the Seminar.

In his opening speech at the Seminar, SBV Deputy Governor Pham Thanh Ha made high evaluation of the coordination between the SBV and the WB in organizing the Seminar with the physical and virtual participation of several WB experts from countries around the world. It was a valuable opportunity to share the experience from countries with large economies, or economies of similar size to Vietnam’s, and to provide suggestions and policy recommendations for the development of policies and roadmap for Basel implementation, taking into account Vietnam's conditions and circumstances.

Ms. Carolyn Turk, WB Country Director for Vietnam, speaks at the Seminar.

Ms. Carolyn Turk, WB Country Director for Vietnam, evaluated that the development of the roadmap for the implementation of Basel II standards in Vietnam had achieved remarkable results since the beginning of the economic transformation. Ms. Carolyn Turk believed that the SBV would be successful in directing the banks to apply Basel principles in order to ensure that the banking system can operate more efficiently and flexibly.

LK