OPPORTUNITIES AND THREATS FOR COMMERCIAL BANKS IN VIETNAM WHEN THE CAPITAL ADEQUACY RATIO APPLIED UNDER BASEL II

Abstract

In order to ensure the safety and soundness of the banking system, the State
Bank of Vietnam (SBV) has issued regulations on safety assurance, specialy ones
on capital adequacy ratios based on national standards and safety in operation of
the banking system in general and capital adequacy in particular. At present, the
capital adequacy ratio of Vietnam has ensured Basel II standards and will, by
2020, follow Basel II throughout the system. This study analyzes the real capital
adequacy ratio of Vietnamese commercial banks for the period 2010-2016,
through SWOT tools, analyzing strengths, weaknesses, opportunities and
challenges for banks when applying the Basel II capital adequacy ratio. Based on
the results of the study, the authors propose solutions to help banks comply with
capital adequacy ratios when implementing Basel II.