LIQUIDITY RISK MANAGEMENT UNDER BASEL ACCORD AT JSC, BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY DISSERTATION LIQUIDITY RISK MANAGEMENT UNDER BASEL ACCORD AT JSC, BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM Major: Master of International Trade Policy and Law CAO THI VAN ANH Ha Noi – 2017 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY DISSERTATION Liquidity risk management under Basel Accord at JSC, Bank for Investment and Development of Viet Nam Major: Master of International Trade Policy and Law Full Name: CAO THI VAN ANH SUPERVISOR: PhD NGUYEN THI HIEN Ha Noi - 2017 ACKNOWLEDGEMENT Firstly, I would like to express my sincere gratitude to my supervisor PhD Nguyen Thi Hien for her support to my study, for her patience, encouragement and immense knowledge Her guidance helped me in all the time of research and writing of this thesis I could not have imagined having a better advisor and mentor for my study Besides my supervisor, I would also like to show my gratitude to all of professors and lecturers during the master course of International Trade Policy and Law for sharing expertise, valuable guidance and encourage extended to me Last but not the least; I would like to thank my all family members for supporting me spiritually throughout writing this thesis and my life in general Hanoi, December, 2016 DECLARATION OF OWNERSHIP I confirm that I have read and understood the guidelines on plagiarism, that I understand the meaning of plagiarism and that I may be penalized for submitting work that has been plagiarized If I have been asked to submit hard copy, I understand that the work can’t be assessed unless both hard copy and electronic versions of the work are handed in I declare that all material presented in the accompanying work is entirely my own work except where explicitly and individually indicated and that all sources used in its preparation and all quotations are clearly cited Cao Thi Van Anh LIST OF ABBREVIATIONS Acronym Definition APEC Asia-Pacific Economic Cooperation ALCO Asset Liability Committee ALM Asset Liability Management APEC Asia-Pacific Economic Cooperation BIDV Joint Stock Commercial Bank for Investment and Development of Vietnam BSC BIDV Security Company BIS Bank for International Settlements BTA Bilateral Trade Agreement BOD Board of Director CBs Commercial Banks CAR Capital Adequacy Ratio ECB European Central Bank FED Federal Reverse FPT Fund Transfer Pricing GDP Gross Domestic Product M&A Mergers And Acquisitions LDR Loan to Deposit Ratio PBOC QE People’s Bank of China Quantitative Easing Acronym Definition ROA Return on Assets ROE Return on Equity NPL Net position Liquidity NSFR Net Stable Funding Ratio LCR Liquidity Coverage Ratio SBV State Bank of Vietnam SDR Special Drawing Right TPP Trans-Pacific Partnership UN United Nation WTO World Trade Organization TABLE OF CONTENTS INTRODUCTION 1 Rationale Literature Review Research Objectives Research Methodology Structural thesis CHAPTER I: THEORETICAL FRAMEWORK ON LIQUIDITY RISK MANAGEMENT ACCORDING TO BASEL II ACCORD 1.1 Fundamental of liquidity risk management 1.1.1 The concept of liquidity and liquidity risk 1.1.1.1 Definition 1.1.1.2 Causes of liquidity risk 1.1.1.3 Measuring liquidity risk 1.1.2 Liquidity risk management 10 1.1.2.1 Definition 10 1.1.2.2 Process of liquidity risk management 10 1.1.2.3 The roles of liquidity management .16 1.2 Liquidity risk management under Basel II Accord 17 1.2.1 Introduction to Basel II Accord 17 1.2.1.2 The basic contents of Basel II 19 1.2.2 Liquidity risk management under Basel II Accord 21 1.2.2.1 Identify liquidity risk management 21 1.2.2.2 Measurement of liquidity risk 24 1.2.2.3 Controlling liquidity risk management 29 1.2.2.4 Monitoring liquidity risk management 33 1.3 Factor effecting to the liquidity risk management 33 1.3.1 Legal framework 33 1.3.2 Information Technology 35 1.3.3 Human resources 36 1.3.4 Others 37 CHAPTER II: LIQUIDITY RISK MANAGEMENT PERFORMANCE UNDER BASEL II ACCORD AT BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 38 2.1 Introduction of Joint Stock Commercial Bank for Investment and Development of Vietnam 38 2.1.1 General Information about BIDV .38 2.1.2 Operational performance of Joint Stock Commercial Bank for Investment and Development of Vietnam in the period 2010 - 2015 39 2.2 Liquidity risk management under Basel II Accord at Joint Stock Commercial Bank for Investment and Development of Vietnam 42 2.2.1 Legal framework on liquidity risk management at BIDV 42 2.2.1.1 Legal principles in liquidity risk management at BIDV 42 2.2.1.2 Organization structure for liquidity risk management at BIDV 44 2.2.2 Liquidity risk management under Basel II Accord at BIDV 46 2.2.2.2 Strategic Business Plan 49 2.2.2.3 The policy of liquidity risk management 50 2.3 Implementation processes of liquidity risk management under Basel II in BIDV 52 2.3.1 Risk identification 52 2.3.2 Measuring risk 53 2.3.3 Controlling risk 57 2.3.4 Monitoring and risk warning 59 2.4 Overall assessment on liquidity risk management at Bank for Investment and Development of Vietnam 61 2.4.1 Achievements 61 2.4.2 Shortcomings 63 2.4.3 Reasons 65 2.4.3.1 Objective reasons 65 2.4.3.2 Subjective reasons 66 CHAPTER III: SOLUTIONS FOR PROMOTING ACTIVITIES LIQUIDITY RISK MANAGEMENT UNDER BASEL II ACCORD AT JSC, BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 69 3.1 Overview of liquidity risk management at BIDV 69 3.1.1 Business orientation 69 3.1.1.1 Forecast world economy and Vietnam's economy period 2017-2020 69 3.1.1.2 Business strategy period 2016 - 2020 72 3.1.2 Oriented development strategy: 74 3.1.3 Objectives towards the Environment and Social Community: 76 3.1.4 Strategic orientation of liquidity risk management 77 3.1.4.1 General orientation on the work of risk management 77 3.1.4.2 Strategy for liquidity risk management 78 3.2 Solutions to boost the liquidity risk management under Basel II Accord at the Joint Stock Commercial Bank for Investment and Development of Vietnam 79 3.2.1 Improving the effectiveness of macroeconomic forecasting 79 3.2.2 Continue to improve policies, regulations, procedures and measuring instruments liquidity risk under Basel II Accord and vision Basel III 80 3.2.3 Perfecting the system of liquidity risk reports 82 3.2.3.1 Liquidity gap report behaviour 82 3.2.3.2 Report endurance test in the conditions of liquidity crisis 83 3.2.3.3 Integrated reporting system of early warning indicators 84 3.2.4 Check the accuracy of the tool, the model used in the management of liquidity risk 86 3.2.5 Construction Data Warehouse System 87 3.2.6 Improving the quality of workforce risk management 88 3.2.7 Initiative in coordination balance sheet according to the principles of Basel II 90 3.2.7.1 Develop retail banking services in order to attract funding sources for low-cost 88 3.2.7.2 Improve the capital performance 91 3.2.7.3 Closely manage the level of customer focus to mobilize large balances and high credit balance 92 CONCLUSION 95 REFERENCES 97 Currently integrated system (dashboard) of BIDV report has made a number of indicators However, according to principle of "Principles of supervision and risk management, strong liquidity" of Basel II, provides for early warning indicators for liquidity risk, the Bank to collect data and build indicators as recommended by Basel II, specifically can add the following indicators: - The asset growth, particularly in the event sponsored by the funds has high volatility; - An increase in the level of concentration of assets or funds; - The continuous increase in extra costs when raising capital on the interbank market (credit spread); - The decline in core deposit ratio (stay-term deposits) or declining turnover ratio on the market deposits 1; - The difficulty in implementing short-term capital mobilization Integrated reporting system should be "tailored" to suit each user subclass, from Executive Board level, senior leaders (including the deputy general director), the management-level staff room, and to every expert level Specifically, at the level of the Executive Board and senior management, integrated reporting system to aggregate indicators as the most concise, showing significant volatility, in addition to adding "only flag newspaper "(flag) with the colours shown high level of risk from (red), medium (yellow) and low (blue) Since then, the Executive Board and senior management can shorten the time to consider these issues to assess the impact of liquidity risk, focusing on discussing the central elements may create tension Liquidity However, at the professional level (working-level) or room-level managers, systems integrators need to report in detail, analysing the data of each index and the factors affecting the volatility of each index, including the relationship between the indexes together This enables monitoring levels below this level can closely monitor 85 the market situation and the details of the bank, to help identify the warning and become high value and support to the management in the decision business provisions 3.2.4 Check the accuracy of the tool, the model used in the management of liquidity risk A mandatory and vital outlined in the Basel II accord on general risk management and liquidity risk management, in particular, the inspection work that the tools and models that banks measure using To test the accuracy of a prediction tool, the result of a measurement model is used; the bank can conduct retest method (back-testing) According Jorion (2007), back-testing is testing a tool, financial models using the data model in the past, after the results predicted, bring results compared actual results that match happened to see the difference between the predicted results and the actual results (known as exceptions) Depending on the number of exceptions, the bank put the model into one of three areas for each product, for example, green, yellow, and red According to BIS (2006), determining the colour of the three areas were identified and classified as follows: First, the blue area: the respective results of inspection of the model showed no quality problems and the accuracy of the models that banks use Second, yellow area: including the results showed that the suspicious questions about the quality and accuracy of the model, but the conclusion are given, not the last Third, the red areas: giving results rechecked model, specify the problems of risk measurement model of banking Banks should evaluate the materiality of the exceptions on the basis of the entire portfolio and risk impact risk on the balance sheet accounting It is important to determine whether exceptions may be signs of a significant trend, periodical or not maintained 86 Sustainability Trends and Significant exceptions made an assessment of the overall suitability of the model and how to improve Steps banks should be effected as follows: First, change the model parameters such as calculation methods, frequency of updates of the data, the level of trust Second, separate group’s by-products cause unexpected fluctuations from the modelling products; after that, the product will be managed in other ways; Third, adjust the timing of the data used in the model to review 3.2.5 Construction Data Warehouse System The Data Warehouse is a collection of databases Overall, stable, not fickle, as updated from time to time, be integrated towards the topic to maximum support decision making process in terms of management A typical Data Warehouse system wills: - Contains a large amount of data relating to all transactions in the past, with long storage time and load new data or data that is updated periodically, can be continuous as a source of basic data analysis tools in the intensive management - Optimized for operation in the required reading extracts data queries This contrasted with the database in the task processing systems is designed to support both operations add, remove, and edit data Basel II regulations very closely the content of the request for data and data management for all the bank's activities, especially for operational risk management, measurement and monitoring risk According to the schedule on Basel II, the central bank has asked the Bank in collaboration with the partners of the central bank assessment data gap distance according to Basel II standards Activity alone liquidity risk management, the level of data to meet the requirements of the Bank is only about 80% compared to standard check of the central bank This indicates that, although the Bank has developed tools and models to measure and monitor liquidity risk, but, the data elements collected and still need to continue to improve to be able to increased 87 accuracy for the tools, models, aims to remove the gap data to the requirements of Basel II In the future, the Bank needs to definitively settle the issues mentioned above and continued rapid project implementation Data Warehouse system, creating conditions for building up a system of measurement tools, reporting systems with high accuracy, integrated information, fast and accurate support for the Executive Board A Data Warehouse system is integrated with the management information system (MIS) can help banks reduce to 80% of the time for data collection and data analysis thus helping leaders use only the maximum time for strategic decisions 3.2.6 Improving the quality of workforce risk management Banking business is complex operations, risks, which cause the majority of risk by people directly or indirectly responsible Therefore, one of the best measures that the Bank needs to is to increase investment, human resource training and served for the general risk management and liquidity risk management in particular There are two main reasons for this situation to explain it is: First, most of the risk management officers previously derived from the professional point of credit, appraisal experts Meanwhile, knowledge of modern risk management left a lot different from these transactions, leading to the aforementioned staff slow to reform or no access to new knowledge, gradually will be lag and not have the capacity to carry out a modern risk management Second, “profession" of risk management in Vietnam market is quite new Courses in Risk Management are taught only in a large number of universities, but the depth and practicality is not high In addition, the international certification of financial risk management as FRM (Financial Risk Management) is not really popular in Vietnam To implement human resource investment expertise in risk management in general and in particular liquidity risk, the Bank needs to do: 88 First, training and fostering of professional expertise, especially peaches creation of Basel II Operational liquidity risk management has difficulty, high complexity by the diversity and richness of the impact of international factors On the other hand, the training must be in the direction of depth, focusing on compliance with the standards of behavior at work Second, training and retraining of foreign language skills Language is the bridge basic, most important in communication and also the cause of the disagreement, misunderstanding, pity risks Improving foreign language skills as a prerequisite for the administrators and staff of the implementation of risk management, especially in the work of implementing Basel II requirements and exchange operations with foreign partners in English Third, train the laws and regulations of the State Bank This is a mandatory requirement for all staff carry out the liquidity risk management The liquidity limits and regulations promulgated by the State Bank is the first criteria, the most important that the Bank needed to comply Fourth, encourage employees to actively participate in and expand internal training activities, enhance professional knowledge and mutual business The employees actively participate in training has a direct impact on the efficiency of training, thus forming the autonomy and self-awareness in learning, professional training Those impacts directly to improve the quality of human resources expand professional knowledge, enhancing skills and operational practices of each employee In addition, the Bank needs to support programs to encourage employees to learn and implement the international certification of advanced risk management, specifically as FRM (Financial Risk Management) Fifth, apply the preferential regime to attract business managers and skilled, talented specialists on their professional qualifications and experience to advise on policy, strategy and risk management , training, transfer of technology in risk management 89 activities Applying to regulations on attracting and keeping talented people with wage policies, reward and satisfactory treatment Last, there should be regulations on the selection staff, new employees fit to actually recruit qualified staff as well as ethics, staffing in place, the right people, boldly promoted young capable staff in the proper location box 3.2.7 Initiative in coordination balance sheet according to the principles of Basel II Most of the principles of Basel II, according to BIS (2008) for liquidity risk management are efficiently directed to the requirements for banks in actively coordinating business activities, in particular for the bank's balance sheet, enhance liquidity reserves through raising funds from the market stability 1, raise funds and activities closely monitor the level of concentration of capital To address the limitations of the Bank on the issue of lack of initiative in coordination to strengthen the balance sheet and risk management activities of the Bank liquidity under Basel II, the authors propose the following three solutions: 3.2.7.1 Develop retail banking services in order to attract funding sources for low-cost Diversifying sources of capital mobilized from the market (the primary market) is also a qualitative standards that Basel II regulations to evaluate the efficiency and liquidity risks in the business activities of banks tomorrow Accordingly, the capital of the commercial banks need to focus on retail services, minimize capital from the interbank market, because of the crisis actually occurs, funds from market interbank funding is unstable, with the high level of volatility That's why, in the latest text of the Basel Committee and the Basel III, capital from the interbank market to the risk factor is multiplied by 100% for debt repayment obligations of banks trade when calculating cash flows in liquidity risk, while capital rose from the primary market only to multiply the risk factor of 10-15% In order to meet the requirements of the Basel Committee on liquidity risk management and improve the efficiency of business operations of the bank itself, the 90 Bank should shift gradually raising capital structure to operate sale pear However, the shift should be cautious and have a specific agenda, reasonably, to avoid spreading the situation developed, lack of focus and no clear strategy Some proposed solutions to resolve this issue as follows: - Further development of banking services and electronic tags Currently the Bank is promoting these services, such as offering new features for the old cards, offer new card products, offer new types of accounts can help customers proactively moderate withdrawal demand, has been awarded a higher interest rate term deposits The ebanking services and customer support so many advantages, such as utilities and electronic payments, savings of generally higher interest rate deposit rate in a range of 0.1 - 0.2% In the future, banks need to further develop these services, especially to coordinate with other service providers such as electricity, drinking water, air services, and telephone services The coordination for the payment of these services can help banks maintain a large customer base with the balance of the deposit account of high demand and low funding costs This is also consistent with the development orientation become the leading retail bank in Vietnam's BIDV - Development through cross-selling retail corporation Currently, BIDV are several subsidiaries operating in the financial sector as BIDV Security company (BSC), BIDV Capital fund management company, asset management company and BIDVAMC debt trading with a very large customer base but has not been used before In the period 2016 - 2020, in addition to focusing on developing additional external customers, the volume of business needs to focus on developing products supporting, accompanying, serving for the expansion of cross-selling within the Group This customer base has helped the Bank can increase income from service charges, are both likely to be an additional stable sources used for business development 3.2.7.2 Improve the capital performance The activity of Treasury & Trading foreign currencies is very important in liquidity risk management at each bank Market access through the interbank money market 91 operations (Money Market - MM), the bank will be more active in the mobilization and use of capital The purpose of liquidity risk management, risk control is to avoid loss of liquidity, and the optimal use of idle funds to maximize the value of bank assets ALM department should cooperate closely with the Treasury to ensure timely capital mobilization and efficient investment of idle funds banks This activity should be carried out and monitored daily, through the control system Nostro account at a department Svetlana cooperation bloc Nostro account management must guarantee three objectives: - First, ensure the currency reserves at the State Bank always meet the requirements of the compulsory reserve of state-owned banks; - Secondly, in collaboration with the operational room to manage the flow to and from the bank, including the prevention of domestic payments, international payments room to forecast the demand for currency on Nostro accounts in day at the bank, as well as cash flows are recorded "yes" to the account of the day; - Third, the effective use of money on Nostro accounts in foreign currency trading transactions (FX) and MM to carry out the purpose of maximizing profits for the bank However, the use of idle funds to investors, ALM room should closely monitor the asset portfolio of the banking liquidity, and liquidity indicators of banks, ensure compliance with all the SBV's regulations and the limits of internal management of the Bank in accordance with the risk appetite statement 3.2.7.3 Closely manage the level of customer focus to mobilize large balances and high credit balance Capital mobilized from various sources in society, from residents or from businesses This is an important source of capital for each bank, but can be volatile, and completely dependent on the objective of environmental fluctuations The problem is the Bank should establish relationships with key customers with high deposit amount to be able to control and predict changes in this fund 92 In terms of handling, with funds mobilized from the population, should have a few specialized staff to contact customers with large deposits at banks The staff is responsible for regular contact with the client to know the plan to use the money from customers Monthly periodical, before week and day before the maturity of time deposits, the employee may contact by telephone with the customer for the customer will continue to withdraw funds or savings Also the staff is also constantly updated promotional information and other attractive products to customers of the bank This reinforces the link between banking - banking customers and help proactively adjust liquidity conditions for banks In addition, banks also need to develop their own policies for customers with large savings and its loyal customers; for example, customers are entitled to agree on raising interest rates with banks Access to fund from large companies and corporations as well as effective measures of liquidity risk management Bank will establish strategic partnership relations; sell shares or customer requirements to maintain certain balances or deposits to maintain balance of payment in a certain level Bank may also require customers to transfer foreign currency through its payment channel for the supply of foreign currency has stabilized, banks will exchange for commitments disbursed or special credit policies for customers This is suitable for companies with a strong export performance, large scale, because in addition to the effects remain good liquidity, banks can also be a lot of cross-selling other products, serves to its profit targets Strict management customers with large outstanding loans are also a very important task in the liquidity risk management Businesses with large loans can be the strategic partners or big clients of the Bank, but not so that core banking is to check before, during and after the loan However, simultaneously with the strict management to individual customer segments or large customers, the Bank should focus closely monitor the level of concentration of capital and credit at the big customer loans, construction reasonable structure deposits and loans on the market, the balance between assets and liabilities, 93 determining the appropriate liquidity reserves optimal This will enable the Bank to minimize liquidity risk in crisis situations, when these customers simultaneously withdrawals or overdue problems, will not make too big impact on the entire balance sheet BIDV This content will also help BIDV more complete accordance with the principles stipulated in the BIS (2008) on liquidity risk management, according to which banks need to control the level of concentration in both deposit and credit with all customers, ensuring these activities not rely too heavily on one or a specific group of customers 94 CONCLUSION Vietnam's economy is in the process of international economic integration, this process takes place more and more powerful Trade liberalization, financial investments take place with an intensity and scale With the large fluctuations of the world economy and the money market, the field of liquidity risk management should be focused focus on developing, in sync with the overall development of the Bank Expected in the next few years, the financial markets - banks will have to face many unpredictable changes, impact significantly on the Bank's business activities and the risks incurred would be very complex and unpredictable newspaper Therefore, the Bank and other commercial banks to develop their businesses need to focus on measures of liquidity risk management is to prevent, prevent, minimize, and there are plans backup plan pre-crisis situations Promoting risk management activities cannot be done in a short time can be perfected, which require banks to have the schedule on a uniform and systematic At the same time, with the deployment under the provisions of the Basel Committee's work will help the liquidity risk management of banks more accurate, complete, comprehensive and identification, early warning of risks based on the model, advanced tools and modern Dissertations presented theoretical basis of liquidity, liquidity risks, the factors that affect liquidity risk, the measurement of liquidity risk, the provisions of Basel II on governance liquidity risk, so that may apply to the introduction of measures to boost the liquidity risk management under Basel II Treaty in the Joint Stock Commercial Bank for Investment and Development of Vietnam Thesis analyzed the achievements have been achieved, the limitations and the cause should be overcome in active liquidity risk management under Basel II, from which the Bank can assess the status of governance current liquidity risk, from which to draw practical measures to improve efficiency in liquidity risk management under Basel II 95 Thesis also launched measures to boost the liquidity risk management under Basel II Treaty in the Bank At the same time, the thesis also provides some recommendations for the central bank in building a legal framework for commercial banks in Vietnam applying Basel II The continued implementation of measures to boost the liquidity risk management under Basel II but also bring opportunities and challenges for the Bank, however, a risk management framework and modern liquidity the effect will be the driving force for business activity in BIDV growing and poised to become one of the joint-stock commercial banks in Vietnam leading 96 REFERENCES A Books: Nguyen Van Tien, 2015, Management commercial banks, Statistical Publishing House, 2015 Phan Thi Thu Ha, 2009, Commercial banks administrator, Publisher Transport State Bank, in 2014, The draft circular regulation on risk management systems in banking system, State Bank of Vietnam Rudolf Duttweiler, 2010, Managing Liquidity in Banks: A Top-Down Approach, 1st, John Wiley & Son Stephen B Harsh, 2015, Management Information Systems, Michigan State University John C Hull, 2015, Risk Management and Financial Institutions, 4th, John Wiley & Son Philippe Jordon, 2007, Value at risk, the new benchmark for managing financial risk, 3rd, McGraw-Hill B Legal Framework: EY Singapore, 2015, Liquidity Risk Management Gap Closure Report and Recommendation, EY Singapore Ltd Singapore, 2013, Liquidity Risk Management, Monetary Authority of Singapore Leonard Matz, 2011, Liquidity Risk Measurement and Management: Basel III And Beyond, 1st, Xlibris Corporation Bank for International Settlements, 2015, A brief history of the Basel Committee, the Basel Committee Bank for International Settlements, 2010, International framework for liquidity risk measurement, standards and monitoring, the Basel Committee Bank for International Settlements, 2008, Principles for Sound Liquidity Risk Management and Supervision, the Basel Committee 97 Bank for International Settlements, 2006, International Convergence of Capital Measurement and Capital Standards, the Basel Committee Policy and Research Division, Statement of Guidance Liquidity Risk Management, Cayman Island Law on the State Bank of Vietnam No 46/2010 / QH12 dated 16/06/2010 10 Credit Institution Law No 47/2010 / QH12 dated 16/06/2010 11 Decree No 156/2013 / ND-CP dated 11/11/2013 of the Government stipulating the functions, tasks, powers and organizational structure of the State Bank of Vietnam 12 Circular 13/2010 / TT / SB Regulations on safety ratios in operations of credit institutions 13 Circular 36/2014 / TT-NHNN dated 20/11/2014 stipulated limits, prudential ratios in operations of credit institutions and branches of foreign banks 14 Circular 06/2016 / TT-NHNN dated 27.05.2016 amending some articles of Circular 36 / TT-NHNN the limits, prudential ratios in operations of credit institutions, foreign bank branches 15 Text 8986 / NHNN of the SBV-TTGSNH dated 29.11.2013 regarding loan classification, provisioning and use of risk reserves of credit institutions 16 Circular 02/2013 / TT-NHNN dated 21/01/2013 of the State Bank regulations on classified assets, the level, method of provision for risks and the use of reserves to handle risks in of credit institutions and branches of foreign banks 17 Circular No 14 / TT-NHNN dated 20.05.2014 amending some articles of the regulations on loan classification, provisioning and use of provisions against credit risks in the banking operations of banks issued according to Decision No 493 / QDNHNN dated 22/4/2005 18 Official Letter No 1601 dated 03.17.2014 of the central bank requires banks to implement Basel II standards at the level of minus 10 Vietcombank, Vietinbank, BIDV, VP Bank, Techcombank, VIB, Maritime Bank, MB, Sacombank, ACB at a higher level 19 The text documents related to liquidity risk management at the Bank issued internal: 98 20 Charter Commercial Bank for Investment and Development of Vietnam 21 Decision No 995 / QD-Board of the Board of Directors issued Risk Management Policy dated 24.6.2013 market 22 Liquidity Management Regulation No 4460 / QD-ALCO dated 07.30.2013, issued by the Director General in accordance with Resolution No 539 / NQ-General Meeting of Shareholders, dated 26.04.2013 23 Regulation Executive internal capital No 1630 / QD-ALCO date 31.03.2015, issued by the General Director based charter organization and operations of the Bank in 2013 24 Decision No 1809 / QD-BIDV's Board of Directors issued policy management market risk, interest rate risk and liquidity risk dated 12.06.2015 25 Annual Report BIDV years from 2010 to 2015 26 Financial reporting years 2010 - 2015 of BIDV 99 ...MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY DISSERTATION Liquidity risk management under Basel Accord at JSC, Bank for Investment and Development of Viet Nam Major: Master of International... SOLUTIONS FOR PROMOTING ACTIVITIES LIQUIDITY RISK MANAGEMENT UNDER BASEL II ACCORD AT JSC, BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 69 3.1 Overview of liquidity risk management at BIDV... liquidity risk, liquidity risk management under Basel II Accord - Application liquidity risk management at Commercial Bank for Investment and Development of Vietnam toward Basel II Accord - Propose