Banking reform in Vietnam

Vietnam’s banking sector is expected to have one of the highest growth rates in Asia during the next few years due to the country’s continued economic expansion, rising household incomes, and relatively low penetration of existing banking services. Over the past two decades, the Vietnamese government has undertaken a series of reforms to strengthen and modernize the sector as part of the country’s move towards a more open and marketoriented economy. Many of these reforms have also been motivated by Vietnam’s growing participation in international agreements and ongoing efforts to adopt international standards such as the Basel capital framework. Key reforms include a restructuring of the banking system, a gradual opening to foreign investment, the partial privatization of state-owned banking institutions, and measures to strengthen the capitalization of Vietnamese banks. This Asia Focus report provides an overview of Vietnam’s banking sector, reviews significant developments since the mid 1980s, and highlights key challenges to reform implementation.Banks and banking - Vietnam

Dynamics of banking technology adoption: an application to internet banking

This paper is concerned with examining behaviour of firms (banks) and consumers (banks’ customers) in the event of a new technology (internet banking) introduction. The determinants of consumer adoption of internet banking are characterised using survey data from Korea in both static and dynamic framework. I find evidence that adoption of internet banking is influenced by sex, age, marital status, degree of exposure to internet banking, and the characteristics of the banks. A duration analysis shows no evidence of first mover advantage (order effects) in internet banking whilst the largest bank (rank effects) in commercial banking remains dominant in internet banking. The results imply that the internet banking adoption is dominated by social norm effects

Banking Fragility & Disclosure: International Evidence

Motivated by recent public policy debates on the role of market discipline in banking stability, the study examines the impact of greater bank disclosure in mitigating the likelihood of systemic banking crisis. In a cross sectional study of banking systems across forty-nine countries in the nineties, it finds evidence that banking crises are less likely in countries with regulatory regimes that require extensive bank disclosure and stringent auditing.http://deepblue.lib.umich.edu/bitstream/2027.42/57254/1/wp874 .pd

Gains from financial integration in the European union: evidence for new and old members

We estimate potential welfare gains from financial integration and corresponding better insurance against country-specific shocks to output (risk sharing) for the twenty-five European Union countries. Using theoretical utility-based measures we express the gains from risk sharing as the utility equivalent of a permanent increase in consumption. We report positive potential welfare gains for all the EU countries if they move toward full risk sharing. Ten country-members who joined the Union in 2004 have more volatile or counter-cyclical consumption and output and would obtain much higher potential gains than the longer-standing fifteen members.International finance ; European Union countries

Rural banking in China

This Asia Focus report presents an overview of China’s rural banking system, historical and recent reforms, and additional areas for improvement.Banks and banking - China

U.S. banking deregulation and self-employment: a differential impact on those in need

Starting in 1978, the U.S. banking sector was gradually deregulated in terms of restrictions on geographical expansion. This paper examines the impact of intrastate branching deregulation on (state-specific) self-employment income growth rate. If postreform changes in the banking structure led to improved lending to previously underserved (potential) businessmen, their self-employment income would accelerate, as banks are the prime source of finance for self-employment. Based on a simple model adopted from Evans and Jovanovic (1989), it is hypothesized that banking deregulation would particularly impact self-employment of discriminated against social groups. Consistent with the hypothesis, cross-state evidence suggests that the growth rate of self-employment income increased after reform, with the effect being more pronounced for women and non-white minorities at the low end of income distribution. Based on the obtained results, this paper suggests that more competitive banking environment after branching reform has mitigated prejudicial discrimination in lending. The analysis casts light on real effects of banking deregulation, on the effect of onsolidation in the banking sector on individuals targeted by the Equal Credit Opportunity (ECOA) and the Community Reinvestment Act (CRA), and on a function of competition in reducing discrimination.Bank supervision ; Banks and banking

Should the FDIC worry about the FHLB? the impact of Federal Home Loan Bank advances on the Bank Insurance Fund

Does growing commercial-bank reliance on Federal Home Loan Bank (FHLBank) advances increase expected losses to the Bank Insurance Fund (BIF)? Our approach to this question begins by modeling the link between advances and expected losses. We then quantify the effect of advances on default probability with a CAMELS-downgrade model. Finally, we assess the impact on loss-given-default by estimating resolution costs in two scenarios: the liquidation of all banks with failure probabilities above two percent and the liquidation of all banks with advance-to-asset ratios above 15 percent. The evidence points to non-trivial increases in expected losses. The policy implication is that the FDIC should price FHLBank-related exposures.Banks and banking ; Financial institutions ; Deposit insurance

The German banking system : system of the future?

In early 1991 the United States Treasury Department of the Bush Administration recommended in ib proposal for Modemizing The FinancialSystem l that, in addition to other remarkable breaks with the traditional United States financial Services framework, the current bank holding Company structure be replaced with a new financial Services holding Company that would reward banks with the ability to engage in a broad new range of financial activities through separate afbliates, including full-service securities, insurance, and mutual fund activities. The Treaaury Department pointed out that commercial banking and investment banking are complementary Services and that the Glass-Steagall Separation was unnecessary. The Treasury Department gave many reasons for the need for financial modernization and why such a modemized System would work better. As an example that demonstrates the advantages of the System proposed by the Treasury Department, the proposal pointed to the German banks and called the German model of a universal banking System the most liberal banking System in the world. -What makes the German universal banking System so unique and desirable? The following outline of the history and the current structure of the Getman banking System is intended to give readers a background tc determine whether the German banking System could be a model for the System of the future