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VietNamNews

Confab to discuss bank cross-ownership

Update: November, 22/2012 - 10:47

HA NOI (VNS)— The heavy incidence of cross-ownership among the nation's banks will be a hot topic at an international conference on financial stability in East Asia to take place in Ha Noi on November 27-28.

The meeting will bring together financial experts, bankers and leaders from 14 economies to assess the regional financial market, share experiences and strengthen co-operation between regional economies and financial institutions, said State Bank of Viet Nam deputy governor Dang Thanh Binh at a press conference in Ha Noi on Tuesday.

Binh himself would moderate the content on cross-ownership, he said, revealing that the central bank was currently auditing cross-ownership among over 30 domestic commercial banks.

The State Bank did not now prohibit commercial banks, shareholders or related persons to own shares in other banks, Binh noted. However, the problem has arisen that shareholders have borrowed money from banks to invest into other banks, forming a chain of incestuous ownership that poses high risks for and undercuts the vitality and transparency of the financial sector.

The central bank was now faced with the task of untangling this web of bank ownership by investigating and assessing the financial capacity of each institution. Armed with its findings, it would issue a series of new regulations next year to address the shortcomings in the banking system, helping contribute to the safety and transparency of the domestic banking system, he said. — VNS

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