Evaluating financial safety of commercial banking system in Viet Nam

Abstract

One of the main factors in safety of commercial banking system is the financial safety. It not only impacts on economy growth but also macroeconomic stability. 

The financial crisis that broke in the US and other Western economies in late 2008, there is now serious concern about its impact on the developing countries including Viet Nam. In recently years, Central bank of Viet Nam has promulgated many legal instruments to raise the knowledge bases in order to build the foundation necessary to ensure safe banking operations, towards a powerful and stable financial system. However, in nearly time, commercial banking system in VN still has existed risk and increased many unfavourable factors such as bad debts went up considerably, profitability decreased sharply,… According to the article,I evaluate financial safety of commercial banking system in VN from 2010 to 2014 by financial indicators such as capital adequacy ratio, credit adequacy, liquidity adequacy, income statement. I also give some recommendations to reinforce financial safety of commercial banking system in VN.