On November 29, 2022, in Hanoi, Vietnam Asset Management Company (VAMC) and the State Bank of Vietnam (SBV) co-organized a Workshop on Developing the NPL Trading Market in Vietnam. This was an activity under the Vietnam Strengthening Banking Sector Soundness and Development Project funded by the Swiss State Secretariat for Economic Affairs (SECO) through the World Bank (WB). SBV Deputy Governor Nguyen Kim Anh attended and chaired the Workshop.
Deputy Governor Nguyen Kim Anh speaks at the Workshop
Speaking at the Workshop, Deputy Governor Nguyen Kim Anh said that the establishment and the development of the debt trading market has contributed greatly to the development of the financial market in general, and the financial safety and stability of the business and the credit institution systems in Vietnam.
Acknowledging the important role of the debt trading market, the Communist Party and the Government have paid much attention to the formulation and improvement of the legal framework for debt trading activities, aiming at the establishment and development of the debt trading market in Vietnam. One of the important milestones which created a premise for the development of the debt trading market in general and the NPL trading market in particular was the establishment and the official start of operation of the VAMC Debt Exchange on October 21, 2021. Thereby, Vietnam’s debt trading activities have made positive changes, contributing to accelerating the debt recovery of the banking sector in particular and the economy in general.
The SBV Deputy Governor assessed that, in fact, Vietnam’s debt trading market is still in its early stage, and there are several issues that need to be addressed, e.g. the inconsistent and inadequate legal framework for the operation of the debt trading market; the non-diversified products in the debt trading market; the limitations of the IT infrastructure; etc.
An overview of the Workshop
Moreover, the SBV Deputy Governor shared that, in the context of unpredictable developments, the negative impacts caused by the COVID-19 pandemic, and the political instabilities and armed conflicts around the world, the acceleration of the development of the debt trading market in Vietnam would contribute enormously to the NPL resolution of the whole banking sector. Deputy Governor Nguyen Kim Anh emphasized that the SBV and the banking industry would continue to create favorable conditions for the relevant entities to operate effectively, fulfill their assigned tasks and functions, gradually building the centralized debt trading market in the future.
The SBV Deputy Governor expressed his beliefs that, in the coming time, the World Bank would continue to support Vietnam and the relevant entities to fulfill the follow-up activities, contributing to meeting the development goals of the banking industry as well as promoting the NPL resolution process at Vietnamese credit institutions. Besides, he also requested VAMC to take note of all comments and suggestions at the Workshop, prepare and submit a report to the SBV's Board of Management.
Participants at the Workshop
The participants at the Workshop focused on discussing the key issues, such as a comprehensive assessment of the legal framework for the establishment and development of the debt trading market in general, and NPL trading market in particular in Vietnam. They also came up with accurate, frank and comprehensive assessments of the results as well as the limitations in the operations of the VAMC Debt Exchange after one year of operation, and made recommendations about the organizational model and the operations of the VAMC Debt Exchange to 2025, orientations to 2030. On the basis of both challenges and opportunities, the international and national experts presented several policy recommendations for the development of the debt trading market in the coming time.
In addition, a panel discussion session themed "Challenges to the development of the NPL trading market in Vietnam and possible solutions", which was also held within the framework of the Workshop, created an opportunity for the administrators, experts, scientists and practitioners in the finance and banking sector to learn and exchange their expertise and knowledge.
The presentations and recommendations made at the Workshop were valuable inputs for the relevant authorities in the formulation of policies, creating a favorable legal framework for NPL resolution and the development of the debt trading market in Vietnam.
Le Hang