FINANCIAL

HANU UNIVERSITY
SUPERVISION
MODEL IN
PRESENTED BY: GROUP 1

2104040035 Nguyễn Thu Giang

2004000030 Trần Thị Lệ Giang

VIETNAM 2104040074 Dương Minh Ngọc

2104040075 Ninh Thị Ánh Ngọc
21040404009 Đỗ Phương Thảo
2104040102 Nguyễn Thị Kiều
 DISCUS
SION
OUTLIN
• Financial supervision models in Vietnam
• Main issues
• Problems
• Suggestions
E TODAY'S
HIGHLIGHTS
 Financial supervision models in Vietnam

4 model of financial supervision in the world

• Functional supervision model

• Twin peaks supervision model

• Integrated supervision model

• Institutional supervision

model
Financial supervision models in Vietnam

Institutional supervision model

Four main characteristics
• There are 3 separate agencies that oversee 3 market segments (banking, securities,

insurance)

• Supervision activities are specialized

• Agencies conduct supervision through a closed cycle

• The coordination, sharing of monitoring information, and limiting systemic risks

must be specified and ensured by legal documents..

Financial supervision models in Vietnam

The financial supervision model of Vietnam

 Financial supervision models in Vietnam
The State Bank of Vietnam
-The State Bank of Vietnam is a ministerial-level ministry of the Government
and is the central bank of the Socialist Republic of Vietnam.

- The State Bank is a legal entity, has legal capital under state ownership, and
has its head office in Hanoi.

- The State Bank performs the function of state management of currency,

banking activities and foreign exchange; perform the functions of the Central
Bank in terms of money issuance, banking of credit institutions and provision
of monetary services to the Government
 Financial supervision models in Vietnam

The Ministry of Financial

The Ministry of Finance is an ministry of the Government,

performing the state management function on: Finance - budget
(including: State budget; public debt; taxes; fees, charges and
revenues) other state budget; state reserves; state financial funds;
price; stock; insurance;...
The Ministry of Finance supervises the securities sector through the
State Securities Commission (SSC) and the insurance sector through
the Insurance Supervisory and Authority .
 Financial supervision models in Vietnam

The National Financial Supervision Commission

-The National Financial Supervision

Commission is an agency performing
the function of advising and advising
the Prime Minister in coordinating
activities of supervision of the
national financial market (banking,
securities, insurance); assisting the
Prime Minister in general supervision
of the national financial market
FINANCIAL
SUPERVISON
MODEL
IN
VIETNAM

MAIN
ISSUES
TA K E N O TE
A N D PR A CTIC E!
• CURRENT SUPERV I SION
M OD EL I N V IETNA M
MAIN
• LI M ITATI O NS O F CURRENT
M OD EL ISSUES
• THE COM PARISON OF THE
FI NA NCI AL SU PERVISION
M OD EL OF V I ET NA M WITH
CHI NA
• SH OULD VI ETN AM CHANGE
THE CURRENT M OD EL?
W HY ?
CURRENT
SUPERVISION
MODEL IN
VIETNAM
1.CURRENT SUPERVISION MODEL IN VIETNAM

• In this day and age, Vietnam currently have been

applying sectoral model for financial supervision

• Many countries also apply this model such as:

Thailand, Phillippines,Chinese,.....
1.CURRENT SUPERVISION MODEL IN VIETNAM

SECTORAL MODEL:
• Three separate agencies that oversee the three market
segments
• Monitoring activities are specialized
• Agencies conduct supervision through a closed cycle
• The assurance of coordination, sharing of monitoring
information, and limitation of systemic risks
2.LIMITATIONS OF CURRENT MODEL

• The lack of ability to create independent

mechanisms for financial supervision
• The difficulty of supervision agencies
• Lack of clarity in model enforcement authority
2.LIMITATIONS OF CURRENT MODEL

SOURCE: CALVO, D, J C CROISSANT, S HOHL AND O PASCAL (2018), “FINANCIAL

SUPERVISORY ARCHITECTURE: WHAT HAS CHANGED AFTER THE CRISIS?”,
FINANCIAL STABILITY INSTITUTE PAPERS 8, BANK FOR INTERNATIONAL
SETTLEMENTS.
COMPARISON

Similarities and Differences

Strengths and Weaknesses.
 SIMILARITIES

STRUCTURE
• Comprehensive supervision of 3
areas: banking, insurance, and
securities
• Agencies related to 3 separate areas
are all under government control
PURPOSES
• Ensure business principles
• Protect customers
• Stabilize the financial system
 SIMILARITIES
CHARACTERISTICS
• 3 separate agencies oversee the 3
market segments
• Specialization of supervision
• Agencies conduct supervision through a
closed cycle
• The coordination and sharing of
supervisory information and the
limitation of systemic risks must be
specified and ensured by various types
of documents
 MAIN ISSUES OF FINANCIAL
SUPERVISION MODEL IN

DIFFEREN
VIETNAM

CES 40

30

between Financial supervision 20

model in Vietnam and China

10

0
Item 1 Item 2 Item 3 Item 4 Item 5
DIFFERENCES
CH A RA CT E RI S T I CS

• In China: The People’s Bank • In Vietnam: The Committee of

of China (PBC) is the National Financial:

responsible for overseeing financial supervision for all 3
three markets markets and only assumes the
function of macro safety
supervision
DIFFERENCES
C HARAC TER ISTIC S

• In China: The financial • In Vietnam: Having

supervision model will deposit insurance and
not have deposit being under the
insurance supervision of the
government
WHICH MODEL IS
BETTER?

CHINA?

VIETNAM?
 VIETNAM'S
STRENGTHS

• Not too complex but still operates smoothly

• Three markets are regulated by three different professional institutions
• The division of management -> reduce the burden on the government
• When one market faces risks, the impact on another market is relatively small
• Have deposit insurance
 VIETNAM'S
WEAKNESSES

• The specific structure has not yet been clearly shown

• The coordination mechanism between the supervisory agencies is not

synchronized and the efficiency is not high

• The mechanism for exchanging information between supervisory agencies is not

timely
• The information provided between financial institutions and supervisory agencies

has a low level of trust and is one-way

• They must concurrently perform many functions
 CHINA'S
STRENGTHS

• Clearly show the structure of the institutional supervision model

• The functions of each specialized agency are clear and separate

• Highly specialized

• Under the comprehensive supervision of the government, there are uniform

and synchronous activities

 CHINA'S
WEAKNESSES

• Do not have deposit insurance

• Lack of consistency in principles, standards, assignment of tasks, and

implementation at all levels

• The assignment of administrative and supervisory functions and tasks is

overlapping, but incomplete

• The structure is no longer appropriate and contrasts

 SHOULD
VIETNAM'S
INSTITUTIONAL FINANCIAL

FINANCIAL
SUPERVISON MODEL

SUPERVISI
ON MODEL
BE
REPLACED
SHOULD OR SHOULDN'T?

Each country has Innovate and change some

China's regulatory
different economic, and institutions in Vietnam's
model is becoming
political systems and regulatory model
outdate
social conditions
FINANCIAL
SUPERVISON
MODEL

PROBLE
 • INFRACTION IN
FINACIAL MARKET
SPECIALIZED SUPERVISORY
AGENCIES DO ALL:

+ ESTABLISH

+ DIRECT

+ SUPERVISE
 No precise rule between specialized
supervisory agencies and the national financial
oversight committee.

Source: Calvo, D, J C Crisanto, S Hohl and O Pascual (2018), “Financial supervisory architecture: What has changed
after the crisis?”, Financial Stability Institute papers 8, Bank for International Settlements.
 2. ENFORCEMENT
AUTHORITY
-SBV IS ONLY AT THE LEVEL OF
POLICY SUGGESTIONS (SOFT POWER)

-WITHOUT THE CLEAR SPECIFIC

AUTHORITY
3. THE MANAGEMENT ROLE
AND THE MONITORING
FUNCTION ARE
INTERDEPENDENT
AS A RESULT,
THERE IS FUNCTIONAL
OVERLAP
EXAMPLE

China's regulatory model is

becoming outdate
 SIMILARITIES

STRUCTURE
• Comprehensive supervision of 3
areas: banking, insurance, and
securities
• Agencies related to 3 separate areas
are all under government control
PURPOSES
• Ensure business principles
• Protect customers
• Stabilize the financial system
4.TECHNOLOGY AND
CYBERSECURITY
CHALLENGES
CHALLENGE: RAPID TECHNOLOGY
ADOPTION INTRODUCES CYBER THREATS
AND DATA PRIVACY CONCERNS IN
FINANCIAL INSTITUTIONS.

IMPACT: BREACHES LEAD TO DATA THEFT,

FRAUD, AND SERVICE DISRUPTIONS,
REQUIRING ROBUST CYBERSECURITY
MEASURES.
5.CROSS-BORDER AND
GLOBALIZATION CHALLENGES
• CHALLENGE: CROSS-
JURISDICTIONAL FINANCIAL
ACTIVITIES CREATE REGULATORY
ARBITRAGE AND HINDER
HARMONIZATION EFFORTS.
• Impact: Differing regulations lead to
regulatory gaps and inconsistent
standards across jurisdictions.
EXAMPLE: THE "PANAMA PAPERS" LEAK (2016)

• 11.5M Documents: Massive data breach from Mossack

Fonseca, Panama law firm.
• Offshore Network: Exposed complex web of offshore
accounts, entities, and transactions.
• Global Implications: Revealed cross-border tax evasion,
money laundering, regulatory arbitrage.
• Impact: Resignations, policy changes, discussions on tax
reforms and transparency.
• Supervision Reminder: Highlighted challenges in regulating
modern financial complexities.
6.EMERGING RISKS AND
FINANCIAL INNOVATION
Challenge: Fintech, cryptocurrencies,
and shadow banking introduce new
risks that traditional models struggle to
address.
• Impact: Lack of clarity on
regulation, oversight gaps, and
systemic risks from complex
instruments.
EXAMPLE: JPMORGAN CHASE DATA BREACH
(2014)
• Magnitude: Massive breach affecting 83 million households
and businesses
• Cybersecurity Vulnerability: Exposed customer data to
hackers.
• Consequences: Undermined data security, risk of identity theft.
• Industry Impact: Highlighted financial institutions'
vulnerability to cyber threats.
• Supervision Emphasis: Reinforced need for robust
cybersecurity and vigilant financial supervision.
SUGGESTIONS
 Suggestions for improving the Financial Supervision
Model
Further enhance the role of the State Bank in the management and supervision of

the financial system

+ Affirm the SBV's responsibility for financial stability legally.

+ Improve the effectiveness and efficiency of the SBV's supervision of the credit

institution system in particular and contribute to the supervision of the financial

system
 Suggestions of supervision models in Vietnam

Review, build a legal framework in the direction of clearly defining

the functions, tasks, powers of each agency in the national financial
supervision system-> avoid overlapping, fill the supervision gap.
Necessary to develop a coordination mechanism or a cross-personal
structure at financial supervisory agencies, to ensure that the
supervision process is closely, fully informed.
 Suggestions of supervision models in Vietnam

Adaptive Supervision for Tech and Data Compliance

Adapting to Tech Evolution
• Collaborate with tech experts for deeper understanding.
• Implement real-time monitoring tools for emerging risks.
• Embrace regulatory sandboxes for controlled tech testing.
Ensuring Data Protection
• Develop clear guidelines for data privacy compliance.
• Train personnel to navigate the evolving data protection landscape.
 Suggestions of supervision models in Vietnam

International Coordination for Financial Stability

Harmonizing Regulations
• Collaborate on global regulatory standards.
• Foster consistent rules to prevent regulatory arbitrage.
• Enhance transparency and cross-border cooperation.
Cross-Border Resolution
• Develop frameworks for resolving cross-border financial crises.
• Strengthen coordination among regulatory bodies.
 Suggestions of supervision models in Vietnam

Adaptive Supervision for Tech and Data Compliance

Adapting to Tech Evolution
• Collaborate with tech experts for deeper understanding.
• Implement real-time monitoring tools for emerging risks.
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