The nationalisation of three failing banks by the State Bank of Vietnam was the main issue discussed by legal experts at the event.
According to the analysis of many participants, recent restructuring measures of the banking system measures such taking weak credit institutions into public ownership were correct.
"According to a legal perspective, it is practical and legal for the State Bank of Vietnam to nationalise the banks without compensation. This helped the banks to repay a large amount of debts and meant that people could withdraw their savings. Therefore I think this type of action is a suitable temporary solution", said Dinh Trung Tung - Deputy Minister of Justice.
The legal basis for nationalising weak credit institutions was clear to all participants at the seminar. However, the question is whether the SBV will be responsible for their debts and use public funds to pay for their restructuring is another issue. Many participants questioned how the SBV will afford to buy weak banks using government funds.
The implementation of bank restructuring requires the banking system to control inflation, reduce interest rates, re-establish discipline, stabilise the gold market and maintain stable exchange rates. And these moves help to strengthen trust among both domestic and foreign customers towards Vietnam’s banking system.
