On November 26th, 2018 in Hanoi, the Banking Academy in collation with the Monetary and Financial Stabilization Department of the State Bank of Vietnam (SBV) co-organized a National Workshop titled “Enhancing the Effectiveness of the Macro-prudential Policy Management in Vietnam”. Dr. Bui Tin Nghi - Director of the Banking Academy and Mr. Do Viet Hung - Director General of the Monetary and Financial Stabilization Department co-chaired the Workshop. Also attending the workshop were representatives from the relevant Ministries, several economic experts and scientists.
Speaking at the Workshop, Dr. Bui Tin Nghi stated that the macro-prudential supervision policy is a system of safety tools to mitigate system risks with a view to minimizing the possibility of a financial system failure. In addition, the macro-prudential supervision policy is also expected to be able to forecast and respond to unexpected financial imbalances, thereby mitigating serious macroeconomic consequences.
According to Dr. Bui Tin Nghi, the study of the system of tools and the transmission effectiveness of the macro-prudential policy is extremely necessary, especially in the context of Vietnam’s deep and broad financial integration today. The Workshop was an opportunity for policymakers, economic experts, and scientists interested in this topic to contribute their ideas in order to analyze and evaluate the effectiveness of the transmission mechanism of the macro-prudential supervision policy on the intermediary objectives: credit growth, exchange rates...; hence limiting the risks to the financial system, and mitigating the macroeconomic consequences.
Following the recommendations of the IMF/WB, the Government has assigned the SBV to stabilize the monetary and financial system through the development of systematic risk prevention solutions in the monetary and financial sector. The SBV has issued Decision No.2563-QD/NHNN dated December 31st, 2016 on the issuance of the Regulation on system risk supervision, thereby gradually standardizing and improving the system risk monitoring process from monitoring, risk identification to evaluation and issuing warnings and recommendations. Vietnam has not officially issued the macro-prudential policy toolkit. Looking back over time, the SBV has applied a number of macro-prudential tools, such as: Credit growth ceilings; Credit limits for discouraged fields...
At the Workshop, Mr. Do Viet Hung - Director General of the Monetary and Financial Stabilization Department, made several recommendations for setting up a macro-prudential policy framework in Vietnam, which emphasizes the improvement of the legal basis by enhancing and improving the legal provisions on financial stability of the relevant parties. On the other hand, Mr. Hung also recommended that the Law on the State Bank be amended to integrate financial stability as a clear function; establishing the National Council/Committee for Financial Stability...
The participants also discussed and shared their views on the implementation and management of the macro-prudential policy in the other countries and Vietnam; evaluated the status of the macro-prudential policy management in Vietnam, the transmission channels, the factors affecting the transmission channels and the effectiveness of the transmission channels of the macro-prudential policy; the system risk monitoring indicators, the macro-prudential policy tools to prevent and mitigate system risks. On that basis, several policy recommendations were made to effectively implement the macro-prudential policy in Vietnam.
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