A Research On Vietnam Commercial Banking Regulation

Commercial banking is the business of risk management, the risk of this business has typical contagion, once there is mismanagement, it will result in the interruption of the financial system's normal operation and defray sector, and will even cause catastrophic consequences for the whole economy, therefore, commercial banking regulation has always been an important issue in financial theory and practice.Vietnam is a developing country, economy is in Transition Period, finance is the core mechanism of resource allocation, its operation system base is shifting from financial repression and restriction of competition to market competition, because of the recent beginning of free market and economic integration with the world, the excessive pursuit of rapid economic growth, the country ignores the prudential requirements of commercial banking security and stability, coupled with the lack of experience in economic management, the mutual shareholding phenomenon between commercial banks in Vietnam is getting more serious every day, it implies market manipulation that caused by interest groups mutual borrowing and lending through financial leverage. If the regulation is not strengthened, it will not only disrupt the national financial and monetary order but also trigger a huge macroeconomic fluctuation.Therefore, on the basis of analyzing the current Vietnam commercial banking regulatory legal framework, using the ACB Bank case, this paper will discuss in depth the variety of manipulative behaviors in Vietnam commercial banks' lending and investing operations, as well as inter-bank mutual holding phenomenon's pushing factors and its macro and micro economic effect, to reveal Vietnam commercial banking regulation deficiencies in the reforming and opening process, to provide a theoretical basis and policy recommendations for improving the financial regulatory system in Vietnam.