Viet Nam: Support for Developing Capital Markets and Building Capacity in the Financial Sector

Sovereign Project | 41365-012

Summary

The TA will complement reforms supported under the Third Financial Sector Program Loan (FSPL III), thus providing continuity to ADB's policy dialog and support for financial sector reforms and development in Viet Nam. Both the FSPL III and the proposed TA are fully aligned with the Government's current Socio-Economic Development Plan 2006-2010, which strongly emphasizes the objectives of business development, private investment, and a continuing transition to a market economy.

Latest Project Documents


Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Project Name Support for Developing Capital Markets and Building Capacity in the Financial Sector
Project Number 41365-012
Country Viet Nam
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7087-VIE: Support for Developing Capital Markets and Building Capacity in the Financial Sector
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Finance - Money and capital markets
Gender Equity and Mainstreaming No gender elements
Description The TA will complement reforms supported under the Third Financial Sector Program Loan (FSPL III), thus providing continuity to ADB's policy dialog and support for financial sector reforms and development in Viet Nam. Both the FSPL III and the proposed TA are fully aligned with the Government's current Socio-Economic Development Plan 2006-2010, which strongly emphasizes the objectives of business development, private investment, and a continuing transition to a market economy.
Project Rationale and Linkage to Country/Regional Strategy

ADB's Country Strategy and Program (2007-2010) highlights the strategic importance of supporting financial and related market institutions due to their critical role in supporting Viet Nam's economic growth. The TA is included in the Viet Nam Country Operations Business Plan 2007-2009.

Financial sector reform and development is a complex process, requiring time and continuity to enable the accumulation of incremental changes into substantial outcomes. The proposed TA is a part of a continuing, long-term engagement of ADB with financial sector development in Viet Nam, through TAs and two program loans (FSPL I approved in 1996 and FSPL II approved in 2002). The financial sector in Viet Nam started off as a rudimentary mono-bank system with virtually no capital markets, weak or absent intermediaries, poor infrastructure and inadequate or missing legal and regulatory framework. ADB assistance and support over the past decade has sought to address critical bottlenecks in infrastructure, legal and regulatory structure, and institutional capacities. FSPL I facilitated the laying down of legal and regulatory foundations of a commercialized banking sector and development of diverse institutions, instruments and markets. FSPL II continued the process of developing alternative channels of intermediation through development of non-bank financial sector; it focused inter alia on strengthening regulatory and supervisory framework for insurance industry, developing a legal framework for leasing industry, introducing an anti-money laundering regime and strengthening financial-market infrastructure. FSPL III along with the proposed TA will build on these successes by focused support for developing bond markets, strengthening investor protection, improving regulatory framework of insurance industry, and continuing enhancement of financial infrastructure.

Impact Capital markets play a greater role in domestic financing.
Project Outcome
Description of Outcome Alternative channels of market-based financial intermediation are strengthened.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

(i) Coordinated institutional framework and related capacity for government debt issuance established.

(ii) Money markets are strengthened.

(iii) Monitoring and enforcement by regulator in securities markets is enhance.

(iv) Enhanced protection for consumers in insurance industry.

(v) Improved accounting and auditing standards.

(vi) Legal framework for leasing, bankruptcy, deposit insurance, and securitized transactions strengthened.

(vii) Institutional framework for regulatory coordination in capital markets strengthened.

(viii) Anti-money laundering regime strengthened.

Status of Implementation Progress (Outputs, Activities, and Issues) Various capacity building activities in relation to the project outputs were undertaken since approval of the TA, including round table discussions, workshops, trainings and study tours.
Geographical Location Viet Nam
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The TA will require an estimated 45 person-months of consulting services, consisting of 30 person-months of international and 15 person-months of domestic consulting services. Consultants will be engaged on an individual basis in accordance with the Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers and other arrangements satisfactory to ADB for the engagement of domestic consultants. Outline terms of reference will be developed in consultation with relevant Government counterpart.
Responsible ADB Officer Stephen Schuster
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
State Bank of VietnamMs. Thinh Thi HongInternational Cooperation Department State Bank of Viet Nam 47-49 Ly Tha To Street, Hanoi, Viet Nam
Timetable
Concept Clearance 21 Dec 2007
Fact Finding 21 Jan 2008 to 24 Jan 2008
MRM -
Approval 05 Jun 2008
Last Review Mission -
PDS Creation Date 26 Feb 2008
Last PDS Update 25 May 2011

TA 7087-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Jun 2008 11 Nov 2008 11 Nov 2008 31 Aug 2009 30 Jun 2011 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 250,000.00 0.00 0.00 0.00 1,250,000.00 05 Jun 2008 782,011.46

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.