-After the State Bank's inspection conclusion, what do you think?
-First of all, I appreciate the State Bank's proactive public disclosure of inspection conclusions in a transparent manner, clearly demonstrating its role in regulating and supervising the national financial and monetary market, especially sensitive areas such as gold bars.
The inspection of large enterprises in the industry such as SJC, PNJ, Bao Tin Minh Chau, DOJI and both TPBank and Eximbank reflects the reality that the gold market in Vietnam still has loopholes in supply chain management, listing-distribution-trading processes, and even signs of violations of risk management and internal control regulations in this specific field.
However, we also need to approach the issue with calmness and objectivity. These violations will continue to be clarified by the investigation agency, but it is also a warning bell for the entire system.
-Is this the main reason why gold prices have increased sharply and people have rushed to buy recently, sir?
- I think this is not the root cause, but one of the factors in the overall picture that has had many changes.
The recent sharp increase in gold prices is mainly due to international macro factors such as: Global geopolitical tensions, especially in the Middle East and the Russia-Ukraine war; expectations that the US Federal Reserve (Fed) will cut interest rates, causing investors to return to gold as a safe haven asset; world gold prices hitting new peaks, pushing up domestic prices, which have lacked a real connection between supply and demand.
However, the monopoly mechanism of a single gold bar brand (SJC) combined with limited supply, large buying-selling price difference, plus crowd psychology affects domestic prices.
Violations by businesses and banks in distribution, supply, and non-transparent price listing can contribute to a decline in trust, increase speculation, thereby creating a queueing effect, leading to a spike in gold prices.
-What is your opinion on handling violations?
-In my opinion, in handling, it is necessary to combine the principles of strictness, humanity and constructiveness.
Systemic violations need to be handled reasonably and appropriately to ensure market discipline and fairness.
However, for technical errors, or due to lack of clear guidance from the management agency, it is necessary to consider handling in a supportive, warning and system-improving manner.
Most importantly, it is necessary to set out requirements to reform the operating mechanism of gold businesses and banks participating in distribution, including: Standardizing price transparency processes; strengthening internal audits and risk control; building a public mechanism, connecting real-time data between businesses and operators.
-According to you, what strong solutions are needed to get the gold market back on track?
-I think we need to implement 5 groups of solutions, but they must be subtle, have a roadmap, and be both reformative and stable.
First, reform the monopoly mechanism of gold bar brands. It is time to reconsider the rationality of SJC being the only brand recognized as state gold bars. Allow some enterprises with capacity, brand and good control to participate in the production of standard gold bars, under the close supervision of the management agency.
Second, develop the physical gold market combined with the derivatives market. Vietnam needs to study reopening the domestic gold trading floor, connecting prices with the world market, and hedging risks with derivatives.
A gold trading floor or national gold exchange, if designed to a standard, could be a turning point for the Vietnamese gold market by increasing transparency, instead of fragmented transactions lacking information as at present; reducing price differences between regions, reducing the risk of price manipulation; creating a foundation for gold derivative financial instruments, thereby promoting the in-depth development of the financial market.
However, the prerequisite is to build a modern legal, supervision and technological system. It is necessary to train a professional market supervision force, and learn from international exchanges such as Comex and Shanghai Gold Exchange. We should not be afraid of “goldenizing the economy” if we know how to “financialize” the gold market in a civilized way.
Third, increase official gold supply and reduce smuggling. It is necessary to have a transparent, public, controlled but flexible gold import mechanism to meet actual supply and demand. At the same time, we must strictly handle gold smuggling, which is the reason why the market is "half-floating, half-submerging".
Fourth, increase transparency and supervision of gold trading enterprises. It is necessary to require enterprises to publicly disclose their price structure (buying and selling prices, profit margins); strengthen the connection of retail data between enterprises-banks-State Bank in real time.
Fifth, financial education, changing people's behavior. I think it is necessary to raise people's understanding of the risks of gold investment, distinguish between gold for accumulation and speculation. Along with that, strong communication is needed to help people avoid being caught up in the wave of queuing and speculation following the crowd mentality - which is the biggest "invisible cost".
Gold is not only a precious metal, but also a symbol of financial confidence. For the gold market to develop healthily, stably and reflect its true value, it requires synchronization of policy mechanisms, management capacity, corporate transparency and public alertness.
Inspection is necessary, but reform is the destination. I believe that with the determination of the State and the cooperation of the business community and banks, the Vietnamese gold market can completely enter a more transparent, modern and stable development phase.
Thank you very much.
Source: https://hanoimoi.vn/can-cai-cach-co-che-hoat-dong-cua-doanh-nghiep-kinh-doanh-vang-704144.html
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