Need a complete legal framework for the Financial Center
In the development orientation of two international financial centers (IFC), Ho Chi Minh City will aim to become a global-scale international financial center, while the center in Da Nang will be regional-scale.
Both centers play a particularly important role in connecting Vietnam with the global financial market, attracting foreign financial institutions, creating new investment resources, and enhancing Vietnam's role, position and reputation in the international arena.
At the workshop “International experience and the role of the banking system in the financial center”, organized by Banking Times on the morning of April 16, Ms. Luu Anh Nguyet - Institute of Strategy and Economic - Financial Policy ( Ministry of Finance ) said that this agency is coordinating with relevant ministries, departments and branches to complete the draft resolution on building IFC.
The drafting committee discussed in detail the management apparatus and the monitoring apparatus, paying special attention to preferential tax policies, land policies and investment promotion support policies, etc., and at the same time studied the state management plan for crypto-asset transactions.
“The international financial center in Vietnam must connect globally, attract international investment capital into Vietnam, create institutional breakthroughs as well as enhance national competitiveness,” Ms. Nguyet emphasized.
According to a representative of the Ministry of Finance, in order to attract financial institutions to the two centers in Da Nang and Ho Chi Minh City, in addition to a complete legal framework, there needs to be preferential tax policies, ensuring stability as well as controlling risks arising from these areas, avoiding "amplifying" risks affecting the domestic market.
According to Mr. Nguyen Duc Long - Director of the Department of Credit Institutions Safety, State Bank of Vietnam, it is possible to identify many different ways and conditions to establish IFC in different countries, but for Vietnam, establishing IFC is still difficult and specific, not only in terms of population size, geography,... but also because of the current legal framework.
Mr. Long cited that capital transaction regulations and capital flow liberalization are important conditions for establishing IFC. Currently, Vietnam still applies strict regulations on this issue. Vietnam's international commitments with trade partners still include requirements to protect the domestic market. Under current conditions, licensing to open more financial institutions and commercial banks (CBs) is still being managed very tightly.
“How to create a legal framework that ensures IFC operates effectively while ensuring macroeconomic safety is a challenge. We understand that traditional banking activities in IFC will not be much, but will be oriented towards modern banking activities according to international practices. Therefore, the management of operational safety must also be given top priority,” Mr. Long analyzed.
The role of banking in IFC
According to Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam, Region II, in the process of building and developing an international financial center, the banking industry plays a very important role, demonstrated in three main aspects.
Firstly , the role of building and creating a legal environment, including building a monetary policy mechanism and banking operations suitable for the purposes and development requirements of an international financial center.
Second , the development of financial institutions including commercial banks, finance companies, financial leasing companies... in the international financial center will ensure effective operation, competition and development.
“In this process, domestic credit institutions (CIs) operating in the international financial center must not only meet the requirements and criteria to become members of the international financial center, but also compete to develop, meet the requirements of applying modern banking technology, high-quality human resources, capital mobilization capacity as well as capital supply and banking services in connection and interaction with the international financial market,” said Mr. Lenh.
Third , capital exploitation and effective use (domestic and foreign) not only promote the development of these markets, but also contribute to creating growth momentum, developing the ecosystem and groups of major service industries of the city.
On the commercial bank side, Mr. Nguyen Manh Khoi, Head of Capital Trading Department, Capital Trading and Market Division - VietinBank, said that it is necessary to encourage and support the development of new financial products, derivatives and innovative investment products, in order to increase flexibility and depth for the market.
At the same time, it is necessary to promote conditions to upgrade the stock market; research, test and gradually put into operation new markets such as commodity markets, foreign currencies, digital assets, etc., approaching the model of international financial centers.
Source: https://vietnamnet.vn/cach-nao-de-viet-nam-co-trung-tam-tai-chinh-quoc-te-tam-co-toan-cau-2391861.html
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