Restructuring the banking system: the case of Vietnam

To Thuy Duong
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To Thuy Duong: Banking Academy of Vietnam

Review of Business and Economics Studies, 2016, issue 4, 32-54

Abstract: This paper aims at studying the restructuring of commercial banks that has been started since 2008 in Vietnam by analysing in two angles: Efficiency and Stability of the banking system. Firstly, the paper applies a modified Data Envelopment Analysis (DEA) model in 2 cases to estimate the changes of the efficiency by analyse the E-scores of 26 commercial banks from 2008 to 2012 and examine the profits and productions efficiency of 7 DMUs of the Vietnamese banking system in 2 years 2011 and 2013. Secondly, this study will calculate the Z-scores and T-test by using SPSS program to assess the stability of the banking system. Moreover, this study uses quantitative and qualitative methods to assess and quantify the results of the Vietnam commercial banks’ restructuring under the Decision No. 254/QD-TTg. The results showed that Vietnamese banking system remained stable during the process and contributed to economic growth, however the results were quite limited and lacks of long-term effects, such as many restructuring objectives were not achieved thorough handling bad debt, cross-ownership, improving governance and enhance the operational efficiency of commercial banks. In particular, the major cause of these problems is due to the lack of a general approach to the overall handling of the issue of restructuring commercial banking system, particularly is missing a legal framework for the systematic implementation of the restructuring process in the context of economic restructure.

Keywords: RESTRUCTURING; BANKING SYSTEM; PERFORMANCE; EFFICIENCY; STABILITY; DATA ENVELOPMENT ANALYSIS (DEA); VIETNAM; РЕСТРУКТУРИЗАЦИЯ; БАНКОВСКАЯ СИСТЕМА; РЕЗУЛЬТАТИВНОСТЬ; ЭФФЕКТИВНОСТЬ; СТАБИЛЬНОСТЬ; АНАЛИЗ СРЕДЫ ФУНКЦИОНИРОВАНИЯ (АСФ); ВЬЕТНАМ (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:scn:031730:16946470

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