Luxembourg,
a gateway to the European market with 500 million plus consumers, has a high
performing, world class financial sector with its investment fund industry
ranked second in the world and its private banking sector seventh.
Patrick Wallerand, director of International
Programmes of the Financial Technology Transfer Agency (ATTF) of Luxembourg
tells VIR’s Hieu Dinh about the prospects for bilateral cooperation in
financial services and his views on the ongoing restructuring process of the
Vietnamese banking system.
What do you think of cooperation prospects between Luxembourg and Vietnam in terms of financial services?
This cooperation can be seen at two levels. The first of these is the existing co-operation or that which is going to start next year – that is, the continuation of ATTF training activities with the State Bank of Vietnam. The second is the project which is more specifically tailored to financial services in terms of improvement and best practices in international banking.
The other aspect of the co-operation, of course, is the business Luxembourg’s financial institutions are doing with Vietnamese banks. I think this is a bit more medium to long term in the sense that for the time being there is no representation of Luxembourg banks in Vietnam.
We also expect that some Vietnamese investment companies, like VinaCapital for instance, will use Luxembourg as a platform to access the EU. So cooperation is always a two-way street.
For the time being, the relationship is more about Luxembourg providing services to Vietnam. But I expect that over time it will be more balanced.
There will be more interest by Vietnamese companies in using Luxembourg as a platform for entering the EU because it is a very big market. Luxembourg is very strong in insurance, banking and finance while Vietnam is carrying out the restructuring of its banking system.
Do you think Luxembourg can help Vietnam in this area?
Definitely. We are holding 15 training seminars in Vietnam this year. These are designed to transfer knowledge about the best practices in risk management, compliance, credit analysis and portfolio management, thus bringing best practice for the use and development of the Vietnamese financial services. This is the first approach.
The second approach is the project running now with the State Securities Commission (SSC) that helps with the development of the capital market. That approach is about participating in the establishment of new regulations for better monitoring. We are bringing in some control and monitoring tools so the supervisors can do a better job at supervising the markets and its participants.
We will discuss needs with the Ministry of Planning and Investment, the State Bank of Vietnam, the SSC, and the National Financial Supervisory Commission and then decide how we can best address those needs with our expertise. So that’s a practical example of how, through training and consultancy, we can help the development of the financial sector in Vietnam.
What do you think of the banking system in Vietnam?
The banking system in Vietnam is large but there are two contradictory elements. One is there are some 50 banks, which seems quite normal in a big country but given only one out of every seven or eight people have access to banks I would think that there are too many banks.
So I think the most pressing issue is how to make it easier for people to gain access to financial services. And if this is not done by banks, it should sometimes be done by microfinance institutions, NGOs, non-bank firms, and maybe also through the post office, for example. In a few countries, the post office is used because there’s a post office in every village. It’s used also for the provision of financial services.
So you have two contradictory elements. Perhaps you have too many banks but perhaps you don’t have enough. So the first thing would be a better penetration of banking services into the general population.
Do you Vietnam is on the right track in restructuring its banking system by merging and acquiring small and inefficient banks?
Well, restructuring the banking sector usually takes place through mergers and elimination of small banks or large banks. Sometimes it can involve nationalisation as was the case in Luxembourg recently. Those are different options to take. But I would like to say that crisis in Europe is also a banking crisis and Vietnam should not repeat out mistakes.
What do you think of cooperation prospects between Luxembourg and Vietnam in terms of financial services?
This cooperation can be seen at two levels. The first of these is the existing co-operation or that which is going to start next year – that is, the continuation of ATTF training activities with the State Bank of Vietnam. The second is the project which is more specifically tailored to financial services in terms of improvement and best practices in international banking.
The other aspect of the co-operation, of course, is the business Luxembourg’s financial institutions are doing with Vietnamese banks. I think this is a bit more medium to long term in the sense that for the time being there is no representation of Luxembourg banks in Vietnam.
We also expect that some Vietnamese investment companies, like VinaCapital for instance, will use Luxembourg as a platform to access the EU. So cooperation is always a two-way street.
For the time being, the relationship is more about Luxembourg providing services to Vietnam. But I expect that over time it will be more balanced.
There will be more interest by Vietnamese companies in using Luxembourg as a platform for entering the EU because it is a very big market. Luxembourg is very strong in insurance, banking and finance while Vietnam is carrying out the restructuring of its banking system.
Do you think Luxembourg can help Vietnam in this area?
Definitely. We are holding 15 training seminars in Vietnam this year. These are designed to transfer knowledge about the best practices in risk management, compliance, credit analysis and portfolio management, thus bringing best practice for the use and development of the Vietnamese financial services. This is the first approach.
The second approach is the project running now with the State Securities Commission (SSC) that helps with the development of the capital market. That approach is about participating in the establishment of new regulations for better monitoring. We are bringing in some control and monitoring tools so the supervisors can do a better job at supervising the markets and its participants.
We will discuss needs with the Ministry of Planning and Investment, the State Bank of Vietnam, the SSC, and the National Financial Supervisory Commission and then decide how we can best address those needs with our expertise. So that’s a practical example of how, through training and consultancy, we can help the development of the financial sector in Vietnam.
What do you think of the banking system in Vietnam?
The banking system in Vietnam is large but there are two contradictory elements. One is there are some 50 banks, which seems quite normal in a big country but given only one out of every seven or eight people have access to banks I would think that there are too many banks.
So I think the most pressing issue is how to make it easier for people to gain access to financial services. And if this is not done by banks, it should sometimes be done by microfinance institutions, NGOs, non-bank firms, and maybe also through the post office, for example. In a few countries, the post office is used because there’s a post office in every village. It’s used also for the provision of financial services.
So you have two contradictory elements. Perhaps you have too many banks but perhaps you don’t have enough. So the first thing would be a better penetration of banking services into the general population.
Do you Vietnam is on the right track in restructuring its banking system by merging and acquiring small and inefficient banks?
Well, restructuring the banking sector usually takes place through mergers and elimination of small banks or large banks. Sometimes it can involve nationalisation as was the case in Luxembourg recently. Those are different options to take. But I would like to say that crisis in Europe is also a banking crisis and Vietnam should not repeat out mistakes.
VIR
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Consulting, Investment and Management, focusing three main economic sectors: International PR; Healthcare & Wellness;and Tourism & Hospitality. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programs. Sign up with twitter to get news updates with @SaigonBusinessC. Thanks.
No comments:
Post a Comment