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Seminar on implementation of Vietnamese money market development project
The State Bank of Vietnam joined the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) in organizing a seminar in Hanoi on November 18 on the implementation of the Vietnamese money market development Project. The seminar which was chaired by Mr. Ta Quang Khanh, Director of the SBV Credit Department, was attended by representatives from GTZ, the SBV departments, the Ministry of Finance, the State Securities Commission, the Hanoi Stock Exchange, the Vietnam Banks Association ,the Vietnam Bond Market Association and credit institutions based in Hanoi and Ho Chi Minh City.
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In order to implement the Project of developing Vietnam's banking sector toward 2010 and orientations until 2020, the SBV Governor issued Decision No.1910/QD- SB dated August 12, 2010 to adopt the Project of developing the Vietnamese money market. Accordingly, the Credit Department, the Monetary Policy Department and the Central Banking Department coordinate with the relevant SBV units to implement the Project in order to gradually improve the sub- markets, and enhance liquidity and short-term capital flow among the market players. The Project also serves to promote the role of the SBV in managing and monitoring the money market, creating conditions for the money market to become a short-term wholesale capital and secondary reserve channel as well as an effective means of disseminating the SBV monetary policy to the market.
According to the adopted Project, in the 2010 – 2013 period, the SBV will maintain the existing model of the money market (A decentralized model). At the same time, the SBV will improve the quality of information and develop effective mechanisms of sharing information among the market players. Regarding the legal framework, the SBV will revise the related legal texts in order to enhance the flexibility for the setting of market interest rates, thereby creating coherence and consensus of the sub – markets. Moreover, the SBV will enhance risk management, and the application of international standards and practices and codes of conduct in the money market.
As one step of the Project agenda, the completion of the legal framework for operations of the money market will focus on such regulations as the mechanism of information collection, processing and usage; Inter-bank lending; Currency brokerage; Derivatives; And operations of the inter-bank foreign exchange market. In addition, the Project also charts out specific tasks and measures, namely formulating or assisting the money market players to formulate standard repo contracts, codes of conduct, development of financial instruments, transparent dissemination of monetary policy management and standard yield curve, capacity building for the money market players, improvement of credit rating…
The Project also requires the SBV to enhance its supervisory role in the money market in order to phase in the interest rate regulating objective in stead of the volume regulating one in its monetary policy management; to encourage professional institutions to participate in the money market; To enhance the role of the Vietnam Banks Association; To improve the financial capacity, the quality of financial services, and infrastructure of credit institutions; and to study and work out the plan to develop the centralized electronic trading floor of the money market for the next stage.
Presentations made at the seminar by the relevant SBV units were highly appreciated as enormous efforts to ensure close cooperation among credit institutions, the Vietnam Banks Association and the Vietnam Bond Market Association and as a great contribution to the future development of the Vietnamese money market.
SBV
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