Liquidity risk management in asia commercial joint stock bank (2012 2016),graduation thesis

THE STATE BANK OF VIETNAM BANKING ACADEMY FACULTY OF FOREIGN LANGUAGES   GRADUATION THESIS LIQUIDITY RISK MANAGEMENT IN ASIA COMMERCIAL JOINT STOCK BANK (2012-2016) Supervisor : Nguyen Thi Hien Hanh (M.A) Student name : Nguyen Thi Ngoc Student code : 16A7510230 Class : K16-ATCD Course : 2013-2017 Hanoi, May 2017 THE STATE BANK OF VIETNAM BANKING ACADEMY FACULTY OF FOREIGN LANGUAGES   GRADUATION THESIS LIQUIDITY RISK MANAGEMENT IN ASIA COMMERCIAL JOINT STOCK BANK (2012-2016) Supervisor : Nguyen Thi Hien Hanh (M.A) Student name : Nguyen Thi Ngoc Student code : 16A7510230 Class : K16-ATCD Course : 2013-2017 ABSTRACT This thesis empirically examines liquidity management in Asia Commercial Joint Stock Bank over the period of 2012- 2016 In the context of domestic economy’s slowrecovery from the global crisis of 2008 and the European sovereign public debt crisis of 2011, Asia Commercial Bank was not only swept up by the current of financial depression but also rose to its internal issues, especially liquidity problem The August, 2012 incident provoked alarm at the bank’s liquidity management and tumbled the whole stock market After five- years of the incident, ACB has already got back on track and recovered in a manner that targets long-term sustainable growth; however, there are a number issues of liquidity management remained unresolved The thesis topic “Liquidity Risk Management in Asia Commercial Joint Stock Bank (2012- 2016)” is subject to analyze the bank’s liquidity indicators and to reveal its fund structure’s flaws together with submitting recommendations upon enhancing ACB’s liquidity position and addressing live issues in the bank structure and business strategies The paper is released under limited time and author’s knowledge; therefore, there are potential shortcomings stemming on the research For further study, the thesis would be in-depth analysis and work out better in Asia Commercial Bank ACKNOWLEDGEMENT I owe a deep debt of gratitude to my supervisor, Mrs Nguyen Thi Hien Hanh for her patient, encouragement and profound knowledge I place on my record my sincere thanks to my sister Nguyen Thanh Nga and my friend Truong Van Han, who have stayed by my side in all lows and highs I take this opportunity to express my heartfelt thanks to all my family members and long- standing friends for supporting spiritually through my lifetime Thank you for all your encouragement! Signature Nguyen Thi Ngoc TABLE OF CONTENTS Abstract Acknowledgement Table of content List of abbreviation List of figure List of table CHAPTER I INTRODUCTION 1.1 Necessity of the thesis 1.2 Research questions .2 1.3 Research scope and subjective .2 1.4 Organization of the thesis .2 CHAPTER II LITERATURE REVIEW 2.1 Commercial bank & main risks in banking operation 2.1.1 Commercial bank 2.1.2 Main risks in banking operation 2.2 Liquidity risk management in commercial bank 2.2.1 Liquidity 2.2.2 Liquidity risk management in commercial bank 2.2.3 Liquidity measurements 2.2.4 Liquidity strategies 12 2.3 Liquidity management practice of Russia commercial banks in 2004 and lessons for Vietnamese commercial banks 14 2.2.1 Russian commercial bank risk in 2004 14 2.3.2 Lessons for Vietnamese commercial banks 15 CHAPTER III LIQUIDITY RISK MANAGEMENT IN ASIA COMMERCIAL JOINT STOCK BANK (2012- 2016) 17 3.1 Overview of Vietnamese economic and financial situations .17 3.1.1 Current state of economic and financial situations .17 3.1.2 Current state of banking sector 19 3.2 Introduction of Asia Commercial Bank .21 3.2.1 Brief overview of Asia Commercial Bank 21 3.2.2 SWOT analysis of Asia Commercial Bank 22 3.2.3 Business performance from 2012 to 2016 24 3.3 Liquidity management of Asia Commercial Bank .27 3.3.1 State Bank of Vietnam regulations on liquidity management 27 3.3.2 Liquidity management structure of Asia Commercial Bank .28 3.3.3 Liquidity measurements of Asia Commercial Bank 30 3.3.4 Evaluation 38 CHAPTER IV CONCLUSIONS AND RECOMMENDATIONS ON LIQUIDITY MANAGEMENT OF ASIA COMMERCIAL BANK 40 4.1 Orientation of Asia Commercial Bank’s development and liquidity management in the up- coming years .40 4.2 Solution to control over liquidity risk and enhance liquidity management capacity in Asia Commercial Bank 41 4.2.1 Some petitions for Asia Commercial Bank 41 4.2.2 Some petitions for government 44 4.2.3 Some petitions for the State Bank .45 REFERENCES 47 LIST OF ABBREVIATION SBV The State Bank of Vietnam ACB Asia Commercial Joint Stock Bank MB Military Commercial Joint Stock Bank Sacombank Saigon Thuong Tin Commercial Joint Stock Bank Vietinbank Vietnam Joint Stock Commercial Bank for Industry and Trade GDP Gross Domestic Product NPL Non-Performing Loans ALCO CAR VAMC Asset-Liability Committee Capital Adequacy Ratio Vietnam Asset Management Company SME Small And Medium Enterprise CEO Chief Executive Officer NLP Net Liquidity Position BOD Board of Directors REPO Repurchase Agreement M&A Mergers and Acquisitions ROA Return On Assets ROE Return On Equity USD United State dollar VND CD Vietnam Dong Certificate of Deposit GP Bank Global Petro Commercial Joint Stock Bank CB Bank Construction Bank of Vietnam SOCB State-Owned Commercial Bank JSCB Joint-Stock Commercial Bank JVB Joint-Venture Bank LIST OF FIGURE Chart Vietnam Gross Domestic Product from 2012 to 2016 18 Chart Vietnam inflation rate from 2012 to 2016 18 Chart 3 Total assets of ACB from 2012 to 2016 25 Chart Total fund- raising of ACB from 2012 to 2016 26 Chart Total outstanding loans of ACB from 2012 to 2016 26 Chart Total pretax profit of ACB from 2012 to 2016 27 Chart ACB’s organizational structure 29 Chart Cash position indicator of ACB, MB and Sacombank (2012- 2016) 32 Chart Liquidity security ratio of ACB, MB and Sacombank (2012- 2016) 34 Chart 10.Capacity ratio of ACB compared with MB and Sacombank (2012- 2016)35 Chart 11 Deposit composition ratio of ACB compared with MB and Sacombank (2012- 2016) 37 Chart 12 Capital adequacy ratio of ACB compared with MB and Sacombank (20122016) 38 LIST OF TABLE Table Cash position indicator of ACB from 2011 to 2016 31 Table Liquid security indicator of ACB from 2012 to 2016 33 Table 3 Capacity ratio of ACB from 2012 to 2016 34 Table Net loans and lease in terms of maturity from 2012 to 2016 35 Table Deposit composition ratio of ACB from 2012 to 2016 .36 Table Capital adequacy ratio of ACB from 2012 to 2016 37 Banking Academy Faculty Of Foreign Language Graduation Thesis Chart Liquidity securities ratio of ACB, MB and Sacombank (2012- 2016) Source: Author’s calculation from banks’ consolidated balance sheets (2012- 2016) It is seen from the chart that liquid security ratio for ACB was much lower and underwent a stage of dramatic change than the figures for MB and Sacombank General speaking, ACB has no difficulties in converting a huge number of these securities into cash to satisfy liquidity needs; however, the lower level of liquid security means the higher risk of liquidity position 3.3.3.3 Capacity ratio = 2012 2013 2014 2015 2016 101,312 105,642 114,745 133,807 161,604 176,307 166,599 179,609 201,457 233,680 57.4634 63.4109 63.8860 66.4196 69.1561 Net loans and lease (Billion VND) Total assets (Billion VND) Capacity ratio (%) Table 3 Capacity ratio of ACB from 2012 to 2014 Source: Arthor’s calculation from ACB’ consolidated balance sheets (2012- 2016) The period experienced a lot of changes in interest rate; therefore, Vietnamese commercial banks had to struggle to make loans and take deposits For ACB, there was a light sustainably increase of the capacity ratio from 2012 to 2016 because the bank granted more loans in line with the increase in total assets However, the loans and lease are often the most illiquid assets so the higher the ratio is, the lower liquidity level the bank remains at The figures implied that bank’s source of liquidity decreased due to high level of net loans and leases As 31 December 2016, current net loans leases to customers was over VND 161,604 million with the loan portfolio in terms of maturity over five years was here under Nguyen Thi Ngoc 34 Banking Academy Faculty Of Foreign Language Graduation Thesis 2012 2013 2014 2015 2016 Short- term 55,878 56,837 58,568 63,927 76,446 Mediumterm 19,406 17,208 19,047 21,342 21,320 Long- term 27,530 33,143 38,708 50,078 65,633 Loans and lease 102,814 107,190 116,323 135,347 163,399 Table Net loans and lease in terms of maturity from 2012 to 2014 Source: ACB’s consolidated financial statements The loan portfolio shifts from mainly focusing on short term lending to balancing between short- term and long- term lending It suggests that in long- term, ACB is able to meet mismatch situation due to difference maturity between customer deposits and bank loans Capacity ratio 80 70 60 50 40 30 20 10 2012 2013 2014 ACB MB 2015 2016 Sacombank Chart 10.Capacity ratio of ACB compared with MB and Sacombank (2012- 2016) Source: Author’s calculation from banks’ consolidated balance sheets (2012- 2016) Nevertheless, in comparison with other commercial bank, ACB’s capacity ratio are stable enough to assure spendable funds request Nguyen Thi Ngoc 35 Banking Academy Faculty Of Foreign Language Graduation Thesis 3.3.3.4 Deposit composition ratio = 2012 2013 2014 2015 2016 12,869 17,798 20,539 23,435 28,334 6,436 11,787 16,436 18,114 23,160 199.9534 150.9969 124.9635 129.3751 122.3402 Demand deposits (Billion VND) Time deposits (Billion VND) Deposit composition ratio (%) Table Deposit composition ratio of ACB (2012- 2016) Source: Author’s calculation from ACB’ consolidated balance sheets (2012- 2016) The chart described a stable decrease in ACB’s deposit composition ratio over the past five years, which implies an increase in bank deposit stability as well as bank’s liquidity position The deposit composition ratio in 2012 stood at high level, while the figure in the next two years suffered a fall of nearly a half Deposit composition ratio 250 200 150 100 50 2012 2013 2014 ACB Nguyen Thi Ngoc MB 2015 2016 Sacombank 36 Banking Academy Faculty Of Foreign Language Graduation Thesis Chart 11 Deposit composition ratio of ACB compared with MB and Sacombank (2012- 2016) Source: Author’s calculation from banks’ consolidated balance sheets (2012- 2016) Demand deposits can be withdrawn at any time via check writing while time deposits could not be accessed before in due In fact, demand deposit upgrades the bank’s competitiveness and multiply its profitability; however, these sources come with low stability and bring about adverse consequences such as non- payment obligation In general, that ACB’ ratio is much higher than other bank implicates possibility of liquidity risk in long run 3.3.3.5 Capital adequacy ratio (CAR) Capital adequacy ratio is to measure of bank’s capital to its risk According to the Basel and Decision number 457/2005/QĐ- NHNN, the minimum capital adequacy ratio must be 8% In Circular number 13/2010/TT-NHNN dated May 20, 2010 of the Governor of the State Bank, the ratio was adjusted to 9% 2012 2013 2014 2015 2016 ACB 13.52 14.66 14.08 12.08 13.19 MB 11.15 11.00 10.07 12.85 13.55 Sacombank 9.53 10.22 9.87 10.00 10.57 Table Capital adequacy ratio of ACB from 2012 to 2016 (%) Source: The State Bank of Vietnam website The table compares the capital adequacy ratio (CAR) of ACB, MB and Sacombank over the period of 2012- 2016 These banks complied strictly with the SBV’s regulation on capital adequacy ratio Capital adequacy ratio 20 (%) 15 10 2012 2013 ACB Nguyen Thi Ngoc 2014 MB 2015 2016 Sacombank 37 Banking Academy Faculty Of Foreign Language Graduation Thesis Chart 12 Capital adequacy ratio of ACB compared with MB and Sacombank (2012- 2016) Source: State Bank of Vietnam website The figures suggests that ACB’ CAR stayed high at around 14%, and surpassed the figure for SBV’s regulations as well as other peers’ level ACB had implemented sound and prudent capital approach management effectively as well as balanced between liquidity and profitability 3.3.4 Evaluation 3.3.4.1 Accomplishments The bank has held its liquidity position The rumor concerning Mr Nguyen Đuc Kien was arrested on Aug 22, 2012 quickly swept and tumbled the whole ACB The new BOD promptly access to the problems and alleviated the public by reiterating that Mr.Kien now only hold less than 5% of total ACB’s stake and no longer was bank’s BOD member To deal with extraordinary withdrawal, ACB arranged appointment to their unconfident customers to keep them calm down among so many bad rumors For customer who withdraw the deposits before maturity, ACB guaranteed to calculate the interest as committed if they return their deposits The bank has set aside provision for outstanding loans gradually cover business loss Regarding their efforts, ACB has maintained liquidity position and re-earn their customer trust ACB has accessed liquidity management flexibly in compliance with SBV regulations on safety assurance ratios in the activities of credit institutions ACB has built their strict rules and policies in liquidity management as their whole operating system Following the international standards, bank’s liquidity measurement is not only recorded based on VND fluctuation but also followed by strong foreign exchange currency movement Specifically, ACB has measured liquidity in day-by-day transaction to bear the sign of instability and quickly access the liquid deficit Regarding liquidity indicators, ACB’s capacity ratio remained at a stable level around 60% enough to assure immediate liquidity needs Moreover, the figures for ACB’ capital Nguyen Thi Ngoc 38 Banking Academy Faculty Of Foreign Language Graduation Thesis adequacy fluctuated at around 14%, much larger than SBV’s regulations as well as other peers 3.3.4.2 Drawbacks Nevertheless, liquidity measurement and forecast are not fully match current situation The bank’s cash reserves and deposits occupied small proportion of under 10% in ACB’s total assets Therefore, in long run, ACB is likely to encounter with liquid risk unless they adjust the cash position ratio In much the same way, at the beginning of the period, ACB just hold a small percentage of liquid securities as this source of fund offers low- level rate of return To put it differently, the bank ignores remaining capital so that they can make more investment on assets, which earns much bigger profits After August incident, the bank has raised awareness of liquidity management by improving liquid security indicator; however, failure in security investment plunged the figure for government security Liquidity management structure is inefficient ALCO has not fulfilled its ultimate responsibilities in the liquidity risk management The bank has followed traditional structure and the Management Committee involves in all banking operations and particularly there is no specialization in liquidity risk management Therefore, the risk management of ACB has not achieved high efficiency Nguyen Thi Ngoc 39 Banking Academy Faculty Of Foreign Language Graduation Thesis CHAPTER IV CONCLUSIONS AND RECOMMENDATIONS ON LIQUIDITY MANAGEMENT OF ASIA COMMERCIAL BANK 4.1 ORIENTATION OF ASIA COMMERCIAL BANK’S DEVELOPMENT AND LIQUIDITY MANAGEMENT IN THE UP- COMING YEARS The prospect of Vietnamese economy is described as stable low- level of inflation rate with a surplus balance of payments Nevertheless, there are numerous challenges, including the government budget deficit, and the urgent solutions to the high level of non-performing loans, credit gap in the SME sector Following the strategic directions for 2017 and the vision to 2020 in relationship with restructuring, ACB, “the bank for every households”, drew up their own targets In term of business strategies, the bank is going to focus more on developing as multi- function retailed banks with target customer segments and strengthen their own financial position and competitiveness Besides, the bank admittedly must continue following the restructuring roadmap approved by the State Bank of Vietnam together with upgrade institutional capacity ACB has made every possible efforts and accomplished many tasks of implementing its strategic direction over the given period and in the upcoming years It is important to bear in mind that ACB’s primary objective is sustainable growth The bank has maintained liquidity position and operating safely as well as overviewed its growth target in compliance with Vietnamese economic context As one of the top retail banks with an established market position, ACB has devoted serious focus on retail banking segment with the target customer of individual and SME sector Apart from offering familiar products and services appropriately, the bank aims at making additional propositions that go beyond customers’ expectation In spite the current fierce competition in the market and slow growth rate over the past few years, ACB is self- assured that by the year 2018 the bank will be the leading retail bank The bank is going to embark on some selected corporate segments Besides proving traditional services, ACB promotes the quality of banking transactions and specific services to this high- conscientious customer segment ACB expresses their willingness to invest more in customer insight and building a mutually beneficial relationship Nguyen Thi Ngoc 40 Banking Academy Faculty Of Foreign Language Graduation Thesis What’s more, it is necessary to improve the bank image recognition in line with its own values and banking culture Another important task needs to be fulfilled is to enhance managerial ability the Board of Director and the Management Board, which requires its members’ actively participating In term of liquidity management, the bank is going toward a standardized model with new approach and greatly high efficiency The liquidity management strategy serves two main purposes including to ensure bank operation safety at reasonable reserves ratio and to maximize the profitability of the bank To begin with, the bank has made every effort to apply international- standardized liquidity risk measurement and appropriate model for risk forecast to quickly access early signs of risk and identify exactly causes Besides, the bank liquidity managers make sure the liquidity risk management consistently throughout the whole ACB system, ensure the arrangement of bank staff and responsibilities for every branches and sub- branches concretely as well as enhance control and direct supervision of ALCO The department must follow obediently the given ratios in the ALCO’ s policy on liquidity risk management as well as strictly comply with the State Bank's regulations on capital adequacy ratio and liquidity ratio in banking operations In addition, ACB measure the supply of and demand for liquidity precisely and timely and make every uses of technical support earned from Standard Chartered Bank to upgrade liquidity risk management 4.2 SOLUTION TO CONTROL OVER LIQUIDITY RISK AND ENHANCE LIQUIDITY MANAGEMENT CAPACITY IN ASIA COMMERCIAL BANK 4.2.1 Some petitions for Asia Commercial Bank Firstly, ACB should build up international- standardized liquidity risk management with effective portfolio management strategy As mentioned in previous chapter, ACB remained traditional liquidity risk management model which suffers from a number of drawbacks Therefore, banks need to innovate and build up international standard model as well as relating policies Apart from liquidity ratios analysis, ACB is better to keep an eye on net liquidity position analysis to identify funds gap accurately Nguyen Thi Ngoc 41 Banking Academy Faculty Of Foreign Language Graduation Thesis It is necessary to set a consistent liquidity management strategy and policies on assets and liabilities management in the whole system In addition, the bank sources and uses of fund should be periodically evaluated and diversified so that the bank enable to handle liquidity position For instance, invest in assets in case of excess liquidity, bank will make investment of these idle funds to generate profit ACB must also prepare a plan for unusual cash needs to deal with potential liquidity risk However, this plan requires early warnings accessing immediately to liquidity position; therefore, bank need to facilitate with great forecast capacity In addition, ACB must also set appropriate liquidity reserves and gauge exactly the gap between cash inflow and outflow of the bank To ensure liquidity risk prevention and the effectiveness of funds usage, reserve ratio and liquidity indicators must observe the SBV regulations, international practices as well as other financial institutions Secondly, ACB should diversify the sources and uses of fund approach along with sustaining the balance between total assets and total liabilities A bank may pose liquidity risk if they depend solely on a fundraising method Therefore, the bank should build awareness amongst varying of fund mobilization resources with different maturities and customer segments Here are some suggestions to drum up customer interest in making deposit into ACBs accounts The bank should introduce a new reasonable interest rate framework with the various maturity level and minimize interest payment but hold high competitiveness with other commercial banks Along with interest strategy, ACB should run promotion and marketing activities to introduce the banking products and services as well as attract depositors by issuing valuable paper, which help bank gain more stable funds surpass volatile funds Thirdly, one of optimal solutions to enhance ACB’s financial capacity is increasing in regulatory capital through long- term instruments with high- rating scales Regulatory capital, though takes up a low percentage of the bank's total capital, plays a crucial role as a bank’s capital conservation buffer against insolvency The more regulatory capital, the stronger bank’s financial ability, which reinforces public belief, maintains bank’s liquidity position unthreatened and ensure capital adequacy ratio (CAR) level in accordance with Circular 13 / TT-NHNN In long run, ACB should raise Nguyen Thi Ngoc 42 Banking Academy Faculty Of Foreign Language Graduation Thesis regulatory capital via different channels The bank can count on the reliable source of raising capital sustainably such as issuance of valuable paper (bonds and negotiable CDs) Similarly, the bank can attract foreign investment with low- cost by listing on regional and some non- regional stock exchanges Another approach to increase reserve funds is deduction of retained earnings as well as set provision against non- performing loans Fifthly, modelling customer satisfaction through quality upgrade of banking services and business scope and network expansion Competitive trends in quality of banking products and services on financial and monetary markets increasingly urged ACB to innovate and issue appropriate customer policies and strategies in order to compete fiercely against other credit institutions With a view to consolidate bank image recognition in customers' eyes, ACB should perform following tasks: promote comprehensive marketing promotions accomplished with preferential policies as well as to customer service improvement; and set a public mode on business information regarding financial statement transparency, banking operations and sense of responsibility to community and society Along with improving bank services, ACB should also expand its network branches and sub- branches, especially electronic banking including ATMs, Internet banking, SMS banking and mobile banking to actively access customer demand for deposits, loans and other payment services Sixthly, improving human resources, especially internal audit department should be counted In the context of fierce competition due to global integration, ACB should focus more on human resources development, one of the key tasks to enhance its competitiveness and financial ability Poor bank officer performance not only weaken business result but also implies very high level of moral hazard Therefore, ACB need to improve the quality of human resources to meet assigned tasks as well as to acknowledge advanced international standards In addition, the bank must design particularly apt training programs for each department thoroughly and ensure problem- solving in reality accomplished with create a fair working environment Nguyen Thi Ngoc 43 Banking Academy Faculty Of Foreign Language Graduation Thesis In liquidity management process, internal auditing plays an important role as it make sure the examination and enforcement of regulations on all banking operations ACB needs to set up an internal auditing system in line with the liquidity risk management process so that bank managers can make regular evaluation on its effectiveness and timely issue appropriate warnings The urgent task is ensuring internal examination regularly to discover failures as soon as possible and propose workable solutions and adopting stringent auditing regulation designed to monitor and screen risk management periodically In long- term, the bank should offer advanced training courses on fostering bank staff’s highly moral character and professional qualification Last but not least, ACB had better observe liquidity position in relation with other types of risks It is important to keep in mind that liquidity risk never stands alone It is necessary for ACB to make some beforehand plan in preparation for potential risks and minimize bank loss due to negative effects 4.2.2 Some petitions for government Firstly, stabilize macroeconomic environment The government should give the first priority in macroeconomic stabilization An unstable macroeconomic environment may attribute to adverse changes of the entire banking operations and business activities in the whole economy In the upcoming years, the government has struggled a numerous challenges; therefore, government policies and solutions must be adopted timely and highly flexibility The government must control potential- risk factors in the economy, curb inflation and stabilize price Once inflation is kept under control and interest rates will remained stable, which paves the way for enterprises in fund approaching Along with addressing domestic issue, management authorities also manage the financial and monetary policies, build up new momentum for FDI and ODA attraction by open economic policies as well as increase Vietnam's credit- rating As well as that, the government guidelines for the whole year must be early released in the beginning of the year It is necessary to publicly announced macroeconomic changes to facilitate individuals and investors with well preparation and acknowledgement Nguyen Thi Ngoc 44 Banking Academy Faculty Of Foreign Language Graduation Thesis It is suggested that the government ensure a comprehensive coordination between macroeconomic policies and other particular policies such as monetary policy, fiscal policy, and exchange rates to control inflation and stabilize foreign exchange market The government should also enhance forecasting capacity and coordinate with agencies and departments to ensure accuracy and consistency in publication Secondly, grant the State Bank more independent authorization It is argued that government should give the State Bank more power in carrying out monetary policies Actually the more independent the State Bank if from the government, the more timely and effectively regulations of the State Bank bring in In order to enhance the SBV’s performance, the independence of the SBV must be counted To be more specific, government should grant the Governor extra powers to actively make decision and use instruments of monetary policy with the view to curb inflation and limit financing government budget deficits Finally, simplify administrative procedures and improve legal corridor The government should make every possible effort to reform legal system following with integration context The must- tasks to minimize administrative procedures and streamline legal corridor are here under To encourage domestic enterprises, government should simplify the administrative procedures and set out favorable conditions for business registration and investment The government also needs to prepare for economic development schedule and create a business environment equality and stability as well as avoid price discrimination, unfair competition and monopolistic competition Another key point in administrative procedures improvement is enhancing technical infrastructure including information systems, auditing and accounting complying with international standards 4.2.3 Some petitions for the State Bank The first important point is flexible administration of national monetary policy Monetary policy that affects the whole banking system should be taken careful consideration and kept its implementation transparent By the way, the State Bank should provide commercial banks with its detail objectives, roadmap and macro management solutions in preparation for capital source adjustment The implementation Nguyen Thi Ngoc 45 Banking Academy Faculty Of Foreign Language Graduation Thesis of monetary policy must be in line with market principles in order to stabilize prices, curb inflation, remain the banking system security and make effective use of interest rate instrument in compliance with the ultimate goal of monetary policy The State Bank should take advantages of monetary policy instruments such as required reserves, discounting, refinancing Besides, State-owned banks need to diversify their debt instruments in the monetary market, develop bilateral REPO market, and standardize transaction procedures to help commercial banks improve their funds access and boost liquidity position Another main task is to strictly control small ineffective banks so that the banking system stay healthy In addition, the State Bank should conduct regular inspection and supervision to promptly detect and strictly handle with violation in capital raising of commercial banks Another key term is to carry out inspection over the maintenance of liquidity ratios in commercial bank Playing a key role in regulating bank operations and market stabilization, the State Bank should thoroughly inspect and supervise the maintenance of liquidity ratios of the commercial bank following with SBV’s regulations (required reserve ratio, CAR) to ensure liquidity position of the whole banking system Nguyen Thi Ngoc 46 Banking Academy Faculty Of Foreign Language Graduation Thesis REFERENCES Consolidated financial statement of Asia Commercial Bank from 2012 to 2016 Annual report of Asia Commercial Bank from 2012 to 2016 Consolidated financial statement of Military Commercial Joint Stock Bank from 2012 to 2016 Consolidated financial statement of Saigon Thuong Tin Commercial Joint Stock Bank from 2012 to 2016 Peter S Rose and Sylvia C Hudgins “Bank Management and Financial Services”, McGraw- Hill International Edition, 7th edition, 2008 “Commercial Banking for ATC” module, by lectures of Banking Academy Dinh Thi Huyen Trang, “Giải pháp hoàn thiện chế quản trị khoản hệ thống ngân hàng thương mại cổ phần Á Châu” thesis, the library of Banking Academy Vu Thi Cam Nhung “Quản trị rủi ro khoản ngân hàng thương mại cổ phần Á Châu: thực trạng giải pháp” , the library of Banking Academy Basel Committee, “Principles for Sound Liquidity Risk Management and Supervision”, September 2008 10 United Nations, “World Economic Situation and Prospects 2016”, New York, 2015 11 B N Porfirʹev and Greg Simons, “Crises in Russia: Contemporary management policy and practice from a historical perspective”, Burlington, 2012 12 Company report, www.stockbiz.vn 13 Asia Commercial Joint Stock Bank official website 14 Nguyen Van Binh, Deputy Governor of the State Bank of Vietnam, “Kiềm chế lạm phát, ổn định kinh tế vĩ mô, bảo đảm an sinh xã hội, đổi mô hình tăng trưởng, cấu lại kinh tế”, www.baochinhphu.vn, 2011 15 “Nhìn lại sách tiền tệ Ngân hàng Nhà nước giai đoạn 2011-2015”, www.vietstock.vn, 2016 16 Nguyen Viet Loi, “Phối hợp sách tài khóa sách tiền tệ Việt Nam giai đoạn 2011-2015 giải pháp đến năm 2020”, www tapchinganhang.gov.vn, 2017 Nguyen Thi Ngoc 47 Banking Academy Faculty Of Foreign Language 17 Graduation Thesis James DeFrantz, “The Role of ALCO Committee and Directors’ Responsibility – Has it Become More than Just Oversight?”, Western Independent Bankers, 2014 18 “Nguyen Duc Kien's arrest in Vietnam prompts ACB fears”, www.bbc.com, 2012 19 David Harper, “Understanding Liquidity Risk”, www.investopedia.com 20 Le Thi Thuy Van,“Tái cấu hệ thống Tài - Ngân hàng giai đoạn 2012 2014 vấn đề đặt ra, www.tapchitaichinh.vn, 2015 21 Nguyen Hoai, “Tránh vạ khoản, ngân hàng bắt đầu lọc dự án BOT”, www.vneconomy.vn, 2016 22 Vu Thi Kim Xuyen and Pham Van Hung, “Tổng quan kinh tế Việt Nam từ năm 2012 đến triển vọng tương lai”, www.nckh.hvnh.edu.vn 23 Hong Phuc, “Ngân hàng Nhà nước hỗ trợ khoản cho ACB”, www.thesaigontimes.vn, 2012 24 “Tất toán trạng thái vàng, nhìn lại ngân hàng chậm trễ, http://tapchitaichinh.vn, 2013 25 Nguyen Thi Hai Binh and Tran Thu Thuy, “Phát triển kinh tế giai đoạn 20112015 định hướng 2016-2020”, www.tapchitaichinh.vn, 2016 26 James Parker, “2012: A Tough Year for Vietnam”, www.thediplomat.com, 2012 27 “New bank crisis in Russia?”, www.pravdareport.com, 2004 Nguyen Thi Ngoc 48