Weak banks must be allowed to fail.

• DNUM_ABZBBZCABE 20:43

Speaking at the meeting hall on the issue of bank restructuring this afternoon (November 1), Delegate Phan Van Quy (Nghe An delegation), member of the National Assembly's Law Committee, said: There should be a policy to allow weak banks to go bankrupt. We have not allowed any bank to be dissolved in the true sense.

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“This creates an unnecessary subsidy, leading to the situation where some bank owners take advantage of banks to manipulate the market, causing the market to operate in a distorted manner, leaving behind heavy bad debts for the economy. This is contrary to the market and international practices,” emphasized Delegate Phan Van Quy.

The delegate also affirmed that the Bank is also a business and must operate in accordance with the Enterprise Law and the Law on Credit Institutions. If its operations are weak and it needs to be dissolved, it must comply with current laws. Only then can we have a healthy and sustainable financial market.

Appreciating the solutions applied by the banking industry in the restructuring process, however, delegates said that bad debt is still high along with cross-ownership, which are two major obstacles to economic development and it is necessary to strongly eliminate these restrictions.

To bring the restructuring of the banking sector to its destination, delegates said that it is necessary to promote bank mergers and consolidation, and for weak banks, it is necessary to require the development of restructuring plans, with incentive mechanisms to create conditions for strong and weak banks to merge and consolidate. At the same time, it is necessary to innovate banking governance.

Along with that, there should be measures to monitor bad debt, first of all, it is necessary to make the bad debt figures of each credit institution transparent. To implement this issue, there should be a plan to closely inspect and monitor each credit institution's activities. Information on bad debt provided by credit institutions must be in accordance with the provisions of law and international practices.

For credit institutions, it is necessary to actively handle bad debts, regularly re-evaluate and classify each bad debt and the ability to recover debts...

The delegate also emphasized the need for transparency in cross-ownership, as cross-ownership in the banking system has reached an alarming level. This is one of the causes of bad debt and the risk of financial manipulation. The long-term solution to prevent this activity is to focus on building a transparent credit and capital market.

Another solution, according to the delegate, is to apply the Law on Deposit Insurance to protect the legitimate rights and interests of depositors. To ensure the healthy operation of the banking system, there should be a ranking of banks.

Regarding the opinion that bad debt handling is not only for the banking sector, in the hallway of the National Assembly on the afternoon of November 1, delegate Le Nam said: Bad debt is a consequence of the activities of the entire economy and to handle bad debt, there must be synchronization. If localities or ministries and branches can resolve outstanding debts in basic construction, bad debt will certainly decrease significantly.

Any policy to promote the warming of the real estate market will have a more positive impact on resolving bad debts in banks. If the health of enterprises is improved, bad debts in banks will also be improved. However, the resolution of bad debts is still mainly and mainly the banks and commercial organizations. Because bad debts arise from commercial activities and bad debts are an inseparable and divisible part of commercial banking activities. The State Bank is the agency that can advise the Government on appropriate solutions to manage factors in the economy to participate in resolving bad debts with credit institutions.

According to VOV