The research evaluated firstly about pros and cons of Italy’s financial system in bank

elements and Australia’s financial system in bank elements, then drawing conclusions by
appraising from comparison between elements, finally to have suggestions for the Vietnam
financial system based on the conclusions.

Initially, the first advantage that Australian central banks have after suffering decline
substantially from Covid-19 epidemic in 2020 (figure 1 in appendix), the country has some
positive recovery of banks’ profitability, and is expecting to have sustainable growth (Reserve
Bank of Australia, 2021). Second benefit is identical to the first, despite the fact that the
pandemic affected Australia's financial system, the liquidity management of superannuation
funds could effectively handle the challenge from the epidemic, according to the Reserve Bank
of Australia (2017) article. Furthermore, the general insurers are still well-capitalized and have
strengthened their preparations for anticipated pandemic-related business interruption claims.  In
contrast, having well-worked solutions in recovering the financial system, Australia remains
some challenges appearing in financial institutions. In information technology aspects are still
residual, and could threaten sustainable finance (Reserve Bank of Australia, 2017). Additionally,
another challenge is that the government stands guard over climate change. Although climate
changes are not considered as significant problems, those problems come from disasters such as
typhoons, floods, earthquakes… will become risks for the financial system. In short, Financial
institutions also need to attract attention on governance and establish a positive culture in order
to combat the wrongdoing that has surfaced in recent years.
  Compared to Australia’s financial system, the Italian financial system has more
advantages, more opportunities in the Eurozone to improve. Also, Italia is expected to be the
busiest market in Europe because the water country is between the merger of European countries
during the epidemic. The domestic European markets had a downward trend due to profit
declining, inflation, and lack of competitive scale. In contrast, the Italian market experienced the
upward trend in developing thanks to the Merger and Acquisition (M&A) while other markets
recovered from the damage caused by the pandemic. Additionally, Italy had the highest number
of announced bank M&A deals in 2020, according to S&P Global Market Intelligence’s data
(appendix figure 2). According to the Damyanova & Garrido (2021) article, although there are
many advantages, the biggest barrier of the Italian market comes from asset quality. Having
inherited bad loans and difficulty to value conditional loans, banks in Italy find it hard to handle
sustainable assets and solve the problems occurring. In short, the Italian government has to solve
the problem in order to develop in Europe.
  Suggestions for the Vietnam financial system is to avoid being subjective even though
there are minor problems; solve the bad loans, nonperformance loans to develop the sustainable
financial system.

To summarize, comparisons between Australia and Italy financial systems have been
made and the country taking more advantages is Italy. Suggestions for Vietnam financial systems
are delivered.
Reference list:
Damyanova, V., & Garrido, F. (2021, March 8). Italy shows most promise as Europe’s domestic
bank M&A wave continues in 2021. Www.spglobal.com.
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/
italy-shows-most-promise-as-europe-s-domestic-bank-m-a-wave-continues-in-2021-
62923088
Reserve Bank of Australia. (2021, April 8). The Australian Financial System | Financial
Stability Review – April 2021. Reserve Bank of Australia.
https://www.rba.gov.au/publications/fsr/2021/apr/australian-financial-system.html  

Appendix
Figure 1 Bank Profitability
Figure 2 announced banking M&A deals