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Vietnam still without monetary brokerage firms
Five years after the State Bank of Vietnam gave the go-ahead to the establishment of monetary brokerage firms, no firm of this kind has been set up, though no one has doubts about the business model.
According to Associate Prof Dr. Le Hoang Nga, Deputy Director of the Stock Scientific Research and Training Centre, monetary brokerage companies act as intermediaries in the monetary market.
The companies collect information, analyse it and then inform their clients about the information. They announce price levels on offer (for the foreign exchange market) and lending and borrowing interest rates (for the monetary market).
In April 2004, the State Bank of Vietnam promulgated the regulation on monetary brokerage, officially recognising and legalising the service. At that time, many experts believed that the legal document would pave the way for the establishment of monetary brokerage firms.
A lot of businesses, especially small-and medium-size enterprises, also considered money brokerage firms a useful channel through which they could access non-bank capital at lost cost.
However, no licence has yet been granted for the establishment of a monetary brokerage firm.
Meanwhile, experts believe that it is not really difficult to set up such a business. A monetary brokerage company does not require much capital, because it mainly provides services. Meanwhile, it is not a problem to have suitable technologies for the companies, since the technologies are popular in developed financial markets, and can be readily transferred to Vietnam.
Dr. Nga believes that no monetary brokerage company has been set up in Vietnam because Vietnam’s monetary market’s conditions are not good enough.
Nga said that finance institutions have not really paid attention to monetary brokerage activities, while the interbank market remains unstable.
Sharing the same viewpoint as Nga, Truong Dinh Song, Head of the Operation Division under the Vietnam Banking Association, said that monetary brokerage activities are most prevalent in developed markets, while Vietnam’s market is still in its infant stage.
Song added that the establishment of monetary brokerage companies depends on the demand of the monetary market, and once the market develops to a certain level, the appearance of such companies is inevitable.
VietNamNet, TBKTVN
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