Việt Nam Asset Managemetnt Company will establish a debt exchange in the next five years. — Photo baodauthau.vn

 HÀ NỘI — Establishing a debt exchange has been earmarked as a key task of the State-run Việt Nam Asset Management Company (VAMC) over the next five years, a good signal for the formation of long-waited debt trading floor to resolve bad debts.

Under VMC’s development strategy over the next five years, recently approved by the State Bank of Việt Nam, VAMC will complete the foundation of the debt exchange and put it into operation in the 2021-25 period.

The central bank also asked VAMC to develop a debt and asset data centre which would be connected with the National Credit Information Centre of Việt Nam (CIC) and credit institutions. This would develop an online debt auction platform.

In order to improve VAMC's financial capacity for the establishment of the debt exchange, the central bank will propose to authorities to increase the charter capital of VAMC to reach VNĐ10 trillion (US$431 million) in 2021-25 period, from currently VNĐ2 trillion.

As Việt Nam had not had a professional debt exchange, the debt trading market saw the participation of just few companies, including VAMC, Việt Nam Debt and Asset Trading Corporation and asset management companies of commercial banks. Therefore, many debts were not easily resolved.

At the Government’s meeting in November, Deputy Governor of the State Bank of Việt Nam Đào Minh Tú said the central bank would license debt exchange when technology and other conditions allowed, which would push the development of a bad debt trading market in Việt Nam. He also stressed that VAMC’s debt trading was very robust.

With a debt exchange, deals would be more transparent, which would allow commercial banks to promote the sale of bad debts and handle them more efficiently.

The debt trading floor would also help attract domestic and foreign investors who remained reluctant over the lack of legalities.

Nguyễn Quốc Anh from the University of Economics, HCM City said that founding a debt exchange was an inevitable trend in the integration but the core factor was creating conditions for the market to attract a large number of participants, he said. 

Debt exchanges in foreign countries drew many participants, including private investors, venture capital funds and enterprises, Quốc Anh said, adding that Việt Nam should study models of foreign debt exchanges in building a legal framework.

He stressed that thoroughly handling bad debts was important to attract the participation of private investors in the debt trading market.

An appropriate debt resolving mechanism was needed to attract investors, including foreign ones, economic expert Đinh Thế Hiển said.

Now there were many types of debts, Hiển said, adding that all types of debts being put into the exchange at the same time would not be effective in the early stage. Hiển said debts mortgaged by real estate assets should be piloted first. — VNS