Financial sector.docx - II Recent financial sector developments There have been some significant developments in financial sector such as the

Financial sector.docx - II Recent financial sector...

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II. Recent financial sector developments There have been some significant developments in financial sector such as the deregulation of domestic interest rates (on both dong and foreign interest rates), the decision to restructure the state-owned commercial banks (SOCBs) and equitization and the permission for 100 per cent foreign-owned banks to enter the market. Bank deposits as a percentage of GDP grew quickly before fall back in the financial crisis 2008. Share market capitalization also grew rapidly along with a sign of share market bubble. Bonds and insurance, pension funds became known by more people but remained relatively small. Banks’ penetration rate within the Vietnamese population is still low (10% approx.) and informal finance still plays an important role in Vietnamese business and households. But concerning the formal market, the regulatory prejudices and inability to address asymmetric information problems have resulted in discriminatory access to
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