Factors affecting liquidity risk of Vietnamese commercial banks

individual for each position is the basis of all efforts in the present and in the future. The lack of care or understanding about this can cost a bank both time and money in the process. Banks should also build a corporate culture for their banks. Once the working environment is dynamic, professional, friendly, open and has its own cultural identity, it will be a driving force for employees to work enthusiastically, dedicate, create and stay loyal to the company. his second home.

3.1.8. Enhance the promotion of the bank's image and brand

In Vietnam, there are many businesses with very good internal resources, but the way they appear outside is not professional. There are products and services that are very good, but are not appreciated by consumers. Therefore, commercial banks should focus on renewing brand image, creating impressions and trusting customers. At the same time, banks should participate in competitions on corporate branding to provide customers with useful information about the bank's services. In addition, commercial banks should have information communication activities for depositors, in case the bank is affected by false rumors that may harm their business, banks should have communication measures to regain credibility and trust with customers.

3.1.9. Building a reasonable internal capital transfer mechanism

In recent years, Vietnamese commercial banks have continuously expanded their business networks. This is a very significant advantage compared to foreign banks when opening branches in Vietnam. However, in addition to calculating the cost - profit brought when opening branches and transaction offices, banks must take into account the flow of capital between branches, transaction offices and the head office. to ensure liquidity for the whole system at the lowest cost. To do this, it is necessary to have a modern technology platform (core banking system). Therefore,

there is no other way that banks need to invest more in information technology; Of course, it's not easy to do while the equity capital of commercial banks is still as small as it is today. However, in all situations, the internal capital movement must be associated with the business performance of each branch, each transaction office, and capital is concentrated in the head office. Only then can we accurately forecast and measure liquidity needs and then have an appropriate liquidity risk management strategy.

The internal capital transfer mechanism needs to take into account the difference in socio-economic conditions in the area where each branch or transaction office operates. A policy that is the same for all trading points can lead to an unwarranted loss of market share. For example, deposit interest rates are the same in the locality, which can reduce the amount of deposits with high competition or difficult socio-economic conditions. An appropriate differentiation policy can contribute to improving the effectiveness of liquidity risk management.

3.1.10. Implement system linkage

In the banking system, if one or two banks the risk can immediately spread to other banks. A commercial bank by itself cannot withstand systematic risk, so it is necessary to take into account the uniformity in liquidity management. Therefore, the commercial banking system at this time needs to focus on building a liquidity management strategy in commercial banks; focus on improving the quality of business activities; unified link between commercial banks to ensure payment safety, create a healthy competitive environment...

3.2. Some recommendations for state management agencies

3.2.1. Completing the legal system to ensure work efficiency

Vietnam is integrating more and more deeply into the regional and world economy. Therefore, it is necessary and urgent to perfect the legal corridor system in general and the legal corridor system on banking activities in particular. In the coming time, it is necessary to focus on developing the Law on State Bank, Law on Credit Institutions and Law on Deposit Guarantee; review and amend the system of legal documents in the banking sector to ensure compliance with Vietnam's commitments upon joining the WTO.

The improvement of the legal system aims to build a healthy, transparent commercial banking system and operate according to the government's controlled market mechanism. To do so, it is necessary to clearly define the functions and duties of each type of bank: commercial banks, investment banks, policy banks, and development banks in order to avoid the unique characteristics of these types of banks. into an unfair competitive advantage over other types of banks.

In the draft Law on Deposit Insurance, it is necessary to study to increase the deposit insurance level of customers at banks. Because raising insured deposits makes customers at banks more secure, avoiding massive withdrawals. This helps commercial banks stabilize deposits, especially when there is liquidity stress.

3.2.2. Restructuring the commercial banking system

The fact that commercial banks in Vietnam have not been able to go bankrupt is also a part of the reason why some commercial banks have grown at all costs, without paying attention to the risks that may affect their operations. unexpected fluctuations in the market in recent years. Because many banks think: If it works,

weak or insolvent and facing the possibility of bankruptcy, the State Bank will intervene. The dependency mentality has made some banks with weak business performance not plan to raise the bar, but just expect that in one way or another the SBV will intervene. This is really not beneficial for the economy and makes commercial banks have no motivation to develop.

The restructuring of the bank is a requirement to overcome existing weaknesses in the system, make the entire banking system healthy, ensure safe and smooth operation, and become a capital conduit. reliable and effective, minimizing risks, especially credit risk, reducing bad debt ratio, increasing liquidity and increasing risk management ability of each commercial bank as well as the whole system. To do so, the restructuring of the banking system must be placed in an overall program with consistent principles, with specific and feasible restructuring forms and roadmaps, and at the same time closely linked. with the economic restructuring program, especially the restructuring of enterprises and investment restructuring.

3.2.3. Strengthen and improve the remote monitoring of commercial banks' activities

Remote monitoring is currently still being carried out by the State Bank of Vietnam in provinces and cities. But the authenticity of this monitoring report to serve the macro management is not high, it does not honestly reflect the operation status in general and the liquidity status in particular of commercial banks. To do this, it is necessary to enhance the functional role of the Banking Supervision and Inspection Agency. The Banking Inspection and Supervision Agency has an organizational structure including: Department of inspection of domestic credit institutions; Department of Inspection of Foreign Credit Institutions; Department of Administrative Inspection, settlement of complaints and denunciations and anti-corruption; Banking Supervision Department; Main Department safe banking operations; Department of Licensing Management of Credit Institutions and Banking Operations; Anti-Money Laundering Department. The Banking Inspection and Supervision Agency has the function of administrative inspection, specialized inspection and specialized supervision on banking. In addition, this agency also helps

The Governor of the State Bank of Vietnam shall perform the state management of credit institutions, small-scale organizations, and banking activities of other organizations; implement the prevention and combat of money laundering in accordance with the law. To grant operation licenses, to split and merge credit institutions; establish and open branches in Vietnam for foreign credit institutions.

3.2.4. Zoning commercial banks with weak liquidity

In the world, bank failures are not uncommon. In recent years in Vietnam, commercial banks have operated very smoothly because they are protected by the State Bank. This has invisibly created dependence for commercial banks. Therefore, in order to strengthen banks, the State Bank also needs to reduce unnecessary protection. In particular, the State Bank supports liquidity but should not lend, the State Bank needs to zone out banks with weak liquidity to take measures to support, to avoid this situation spreading through banks. other.

3.2.5. Speeding up the equitization of state-owned commercial banks

According to many experts' assessments, Vietnam's banking system is still strongly influenced by government agency interference, weak financial status, incomplete legal framework, and banking technology. lagging behind other countries, high bad debt, and unstable macroeconomic environment have put the banking system in a rather high risk situation. Therefore, the banking sector needs to quickly integrate with the regional and international banking system, build a strong competitive banking system that fully meets the requirements for capital and product supply. services for the economy in the process of integration. Vietnam needs to introduce reasonable institutional and legal reforms, this reform in the trend of international integration is a complicated process and cannot be completed overnight.

and limit the ability to take advantage of the benefits of international financial integration. Therefore, when the economic and social conditions are favorable, the Government should equitize state-owned commercial banks to increase charter capital, and at the same time contribute to the supply and diversification of goods in the financial market. Gradually remove subsidy and protection mechanisms for Vietnamese commercial banks, and at the same time gradually expand restrictions on foreign banks along with consolidating and sounding Vietnamese commercial banks with current policies. As a result, it is possible to increase competitiveness and improve the sense of responsibility of commercial banks for their business activities.

CONCLUSION OF CHAPTER III‌

In Chapter III, the author has outlined some solutions that have a positive impact on the factors affecting liquidity risk of Vietnamese commercial banks. Through a number of solutions aimed at commercial banks themselves, such as policies on capital increase, asset growth, asset management - capital sources, etc., the study also has some recommendations for state management agencies as needed. perfecting the legal system, zoning out weak commercial banks… to help strengthen the strength of commercial banks from a liquidity perspective, so that safety and profitability factors can be harmonized, ensuring a Sustainable Development.

CONCLUDE

In the current period, the activities of commercial banks in Vietnam have made strong progress, contributing positively to boosting the national economy. However, reality also proves that the business activities of commercial banks today still have many potential risks, in which liquidity risk is considered one of the most dangerous risks.

The study used Financing Gap as a measure of liquidity risk of Vietnamese commercial banks. Through the results of model estimation with panel data collected during the period 2007-2013, the author finds that two independent variables affecting bank liquidity risk are total asset size (SIZE). and loan-to-total assets (TLA) ratio. Accordingly, the SIZE variable has a negative impact on the liquidity risk of commercial banks, once the total asset size increases, it will reduce the liquidity risk, conversely, the TLA variable has a positive relationship with the liquidity risk. , the more lending, the higher the liquidity risk. Contrary to initial expectations, the remaining variables such as ROE, ETA, GDP, INF are not statistically significant in the estimation models.

The results obtained from the research paper help the author to make some recommendations to commercial banks and related agencies in managing liquidity risk more effectively.

Despite the best efforts, the research cannot avoid shortcomings, in the future the author hopes to develop and perfect the research model in a more extensive way with higher reliability.

REFERENCES LIST OF DOCUMENTS ENGLISH

1. ABBank's Annual Report 2007-2013

2. ACB's Annual Report 2007-2013

3. Agribank's Annual Report 2007-2013

4. BIDV's Annual Report 2007-2013

5. Dongabank's Annual Report 2007-2013

6. Eximbank's Annual Report 2007-2013

7. Annual report of HDbank 2007-2013

8. Annual Report of Kienlongbank 2007-2013

9. Oceanbank's Annual Report 2007-2013

10. PGbank's Annual Report 2007-2013

11. Sacombank's Annual Report 2007-2013

12. Seabank's Annual Report 2007-2013

13. Vietcombank's Annual Report 2007-2013

14. Vietinbank's Annual Report 2007-2013

15. Law on Vietnamese credit institutions 2010

16. Law on State Bank of Vietnam 2010.

17. Nguyen Dang Don, Management of modern commercial banks , Phuong Dong Publishing House, 2010.

18. Peter. Rose, Commercial Banking Administration, Financial Publishing House, 2010.

19. Tran Huy Hoang, Textbook of Commercial Banking Administration , Labor and Social Publishing House, 2011.

20. Truong Quang Thong, Factors affecting liquidity risk of Vietnam's commercial banking systems . Economic Development Magazine, No. 276, pp. 50-62.

21. Truong Quang Thong, Commercial Banking Administration, Finance Publishing House, 2010.

22. www.vneconomy.vn

23. www.vnexpress.net

24. www.wikipedia.org

LIST OF ENGLISH DOCUMENTS

1. Bunda and Desquilbet, (2008), Determinants of liquidity risk of banks from emerging economies , working paper.

2. Pavla Vodova, (2011) Determinants of Commercial Bank' Liquidity in the Czech Republic , working paper.

3. Tamara Kochubey and Dorota Kowalczyk, (2014), The relationship between Capital, Liquidity and risk in Commercial Banks , working paper.

4. Valla and Saes-Escorbiac, (2006), Bank-specific and macroeconomic determinants of liquidity of English banks , working paper.

5. Vodova. P., (2013a), Determinants of Commercial Banks' Liquidity in Hungary , working paper.

6. Vodova. P., (2013b), “ Determiningants of Commercial Banks' Liquidity in Poland ”, working paper.

APPENDIX

MODEL RUN TABLE DATA
YEAR	BANK	FGAP	SIZE	ETA	TLA	ROE	GDP	INF
2007	ABBANK	0.00256234	16,65891	0.14435677	0.3971258	0.06524242	0.085	0.1236
2008	ABBANK	-0.0160066	16.41776	0.2931286	0.47856019	0.01256373	0.062	0.1989
2009	ABBANK	-0.0852754	17.09334	0.16929715	0.4804458	0.06941785	0.053	0.0688
2010	ABBANK	-0.099785	17.45308	0.1219337	0.51751993	0.1302657	0.0678	0.1175
2011	ABBANK	-0.0928389	17.54423	0.11319096	0.47080579	0.0666243	0.0589	0.1813
2012	ABBANK	-0.2258431	17,64445	0.10649538	0.3986242	0.08148368	0.0503	0.0681
two thousand and thirteen	ABBANK	-0.2458601	17.86951	0.09968253	0.39899696	0.02446907	0.0542	0.0604
2007	BIDV	-0.0305917	19.13613	0.05689075	0.63116046	0.13145992	0.085	0.1236
2008	BIDV	-0.0264789	19.32285	0.05463047	0.63640429	0.14699074	0.062	0.1989
2009	BIDV	0.04628055	19.50733	0.05950547	0.67806234	0.15972835	0.053	0.0688
2010	BIDV	0.01146114	19.71888	0.06612575	0.67955333	0.15515	0.0678	0.1175
2011	BIDV	0.11724306	19.82126	0.06011122	0.70998341	0.1315745	0.0589	0.1813
2012	BIDV	0.06384198	19.99922	0.054652	0.68898469	0.09703237	0.0503	0.0681
two thousand and thirteen	BIDV	0.08386009	20.12249	0.05842596	0.70185923	0.12580247	0.0542	0.0604
2007	SEABANK	0.00955206	17.08275	0.12821486	0.4190282	0.08886606	0.085	0.1236
2008	SEABANK	-0.0480589	16.92787	0.18586446	0.33402781	0.07687173	0.062	0.1989
2009	SEABANK	-0.0941592	17.23641	0.17914962	0.3093395	0.08388307	0.053	0.0688
2010	SEABANK	-0.083288	17.82723	0.10396841	0.36546665	0.10954668	0.0678	0.1175
2011	SEABANK	-0.1487724	18.43155	0.05476894	0.19104268	0.02277137	0.0589	0.1813
2012	SEABANK	-0.2027095	18.13389	0.07436197	0.21620857	0.00944876	0.0503	0.0681
two thousand and thirteen	SEABANK	-0.1973399	18.19584	0.07170115	0.25572061	0.02649094	0.0542	0.0604
2007	PGBANK	0.12855506	15.35908	0.11607656	0.40879657	0.07530586	0.085	0.1236
2008	PGBANK	0.0240154	15.63751	0.16589475	0.37960525	0.06387985	0.062	0.1989
2009	PGBANK	-0.0648933	16.15909	0.10495589	0.59700955	0.15999868	0.053	0.0688
2010	PGBANK	0.00466934	16.61147	0.13270051	0.65826186	0.10067626	0.0678	0.1175
2011	PGBANK	0.05704979	16,68239	0.14736458	0.67843124	0.17223394	0.0589	0.1813
2012	PGBANK	0.05904437	16.77307	0.16591606	0.69965971	0.0751351	0.0503	0.0681
two thousand and thirteen	PGBANK	-0.0072992	17.0294	0.12902668	0.5499185	0.01190198	0.0542	0.0604
2007	OCEANBANK	0.16715827	16.43145	0.08147414	0.34402738	0.08735371	0.085	0.1236
2008	OCEANBANK	-0.0343979	16.46107	0.07651241	0.42063232	0.04201502	0.062	0.1989
2009	OCEANBANK	-0.3918409	17.33553	0.06666807	0.30009358	0.1092533	0.053	0.0688
2010	OCEANBANK	-0.4513995	17.82537	0.07412812	0.3164399	0.12732501	0.0678	0.1175
2011	OCEANBANK	-0.2655556	17.9529	0.07413954	0.30261616	0.10506584	0.0589	0.1813

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2012	OCEANBANK	-0.2741902	17,98159	0.06957288	0.3965893	0.05423057	0.0503	0.0681
two thousand and thirteen	OCEANBANK	-0.360324	18.02133	0.06492286	0.41379524	0.04331635	0.0542	0.0604
2007	SACOMBANK	-0.1398632	17.9833	0.1138196	0.54512942	0.19019889	0.085	0.1236
2008	SACOMBANK	-0.1624807	18.04145	0.11336625	0.51153716	0.123057	0.062	0.1989
2009	SACOMBANK	-0.0082607	18.46009	0.10139249	0.57351947	0.15839547	0.053	0.0688
2010	SACOMBANK	0.02722928	18.84193	0.09199159	0.54128526	0.13627456	0.0678	0.1175
2011	SACOMBANK	0.03275845	18,76759	0.10282754	0.56356312	0.13720138	0.0589	0.1813
2012	SACOMBANK	-0.0845276	18.84017	0.08817356	0.62377553	0.07473202	0.0503	0.0681
two thousand and thirteen	SACOMBANK	-0.1389932	18.89926	0.10573777	0.67676191	0.13063414	0.0542	0.0604
2007	KIENLONG	0.1781853	14.60436	0.29007863	0.61085578	0.08436126	0.085	0.1236
2008	KIENLONG	0.18095364	14,89359	0.35633909	0.74302913	0.03557096	0.062	0.1989
2009	KIENLONG	0.00681959	15.82754	0.14931942	0.64791171	0.0820326	0.053	0.0688
2010	KIENLONG	0.03178763	16.34744	0.25642466	0.55229967	0.06064825	0.0678	0.1175
2011	KIENLONG	0.0096654	16,69747	0.19362951	0.46551445	0.11417851	0.0589	0.1813
2012	KIENLONG	-0.0591776	16.73765	0.1853973	0.51351399	0.10189798	0.0503	0.0681
two thousand and thirteen	KIENLONG	-0.0608318	16.8776	0.16262803	0.56164409	0.09017624	0.0542	0.0604
2007	HDBank	0.38611814	16.44181	0.0535888	0.64221375	0.16330964	0.085	0.1236
2008	HDBank	0.18816432	16.07288	0.17499535	0.64191204	0.03583901	0.062	0.1989
2009	HDBank	-0.0675484	16.76663	0.09390516	0.42698984	0.10812153	0.053	0.0688
2010	HDBank	-0.0681276	17.35325	0.0685574	0.33857569	0.1142704	0.0678	0.1175
2011	HDBank	-0.1195493	17.62274	0.07879173	0.30443027	0.12021994	0.0589	0.1813
2012	HDBank	-0.2521558	17.7817	0.10218751	0.3969541	0.06052009	0.0503	0.0681
two thousand and thirteen	HDBank	-0.2209405	18.27249	0.0997319	0.50254747	0.02530319	0.0542	0.0604
2007	ACB	-0.276453	18.26276	0.07328406	0.37095323	0.28121372	0.085	0.1236
2008	ACB	-0.2812075	18,47238	0.07375134	0.32860458	0.28464445	0.062	0.1989
2009	ACB	-0.1463013	18,93877	0.06019909	0.37144144	0.21780541	0.053	0.0688
2010	ACB	-0.0962517	19.13902	0.05546852	0.42512848	0.20522492	0.0678	0.1175
2011	ACB	-0.1402357	19.45393	0.04255612	0.36584373	0.26823449	0.0589	0.1813
2012	ACB	-0.1356767	18,98774	0.07160469	0.57463639	0.06210487	0.0503	0.0681
two thousand and thirteen	ACB	-0.1948919	18.9311	0.07505569	0.63410972	0.06609722	0.0542	0.0604
2007	EXIMBANK	-0.1321245	17.33332	0.1867358	0.54737226	0.07361735	0.085	0.1236
2008	EXIMBANK	-0.1999164	17,69186	0.26621051	0.44006543	0.05535734	0.062	0.1989
2009	EXIMBANK	-0.0058765	17,99677	0.20402833	0.58644491	0.0848076	0.053	0.0688
2010	EXIMBANK	0.02720561	18.69155	0.1030482	0.47072841	0.13431085	0.0678	0.1175
2011	EXIMBANK	0.11108683	19.2809	0.08880963	0.40336501	0.18640456	0.0589	0.1813
2012	EXIMBANK	0.02267121	18.95223	0.09292769	0.43675185	0.13525343	0.0503	0.0681
two thousand and thirteen	EXIMBANK	0.01867021	18.95034	0.08643847	0.48660789	0.04487001	0.0542	0.0604

2007	EAST ASIA	0.12654618	17.12518	0.11795699	0.64997148	0.10289499	0.085	0.1236
2008	EAST ASIA	0.06606869	17.36263	0.10125701	0.72894167	0.15327	0.062	0.1989
2009	EAST ASIA	0.14198528	17.56549	0.09822083	0.7998704	0.1407072	0.053	0.0688
2010	EAST ASIA	0.11556631	17.83859	0.09701063	0.67786351	0.12164088	0.0678	0.1175
2011	EAST ASIA	0.11240723	17,98586	0.08980425	0.66948197	0.16291611	0.0589	0.1813
2012	EAST ASIA	-0.0149265	18.05364	0.08811125	0.71820784	0.09456028	0.0503	0.0681
two thousand and thirteen	EAST ASIA	-0.1726338	18.13193	0.07855072	0.69612013	0.0557601	0.0542	0.0604
2007	VIETNAM BANK	-0.0735077	18,92818	0.0640921	0.60490299	0.10796401	0.085	0.1236
2008	VIETNAM BANK	-0.015666	19.08125	0.063723	0.61264248	0.14627438	0.062	0.1989
2009	VIETNAM BANK	0.05369126	19.3118	0.05157031	0.66295809	0.22857144	0.053	0.0688
2010	VIETNAM BANK	0.06939178	19,72281	0.04941463	0.62939144	0.18790747	0.0678	0.1175
2011	VIETNAM BANK	0.0719145	19.94805	0.06185552	0.63047185	0.21969709	0.0589	0.1813
2012	VIETNAM BANK	0.08058608	20.03715	0.06677758	0.65474285	0.18348744	0.0503	0.0681
two thousand and thirteen	VIETNAM BANK	0.01473318	20.17226	0.09381962	0.64713598	0.10740664	0.0542	0.0604
2007	VIETCOMBANK	-0.2333794	19.10056	0.06854239	0.48402361	0.17597578	0.085	0.1236
2008	VIETCOMBANK	-0.2181526	19.21859	0.06279373	0.48907136	0.23056471	0.062	0.1989
2009	VIETCOMBANK	-0.1255424	19.35872	0.06540353	0.53619653	0.23466648	0.053	0.0688
2010	VIETCOMBANK	-0.1093709	19.54397	0.06721867	0.55651057	0.2039018	0.0678	0.1175
2011	VIETCOMBANK	-0.0625197	July 19, 2012	0.07809369	0.55652326	0.14725992	0.0589	0.1813
2012	VIETCOMBANK	-0.1194067	19.84256	0.1023648	0.56910907	0.1058442	0.0503	0.0681
two thousand and thirteen	VIETCOMBANK	-0.1335996	19.96282	0.09215328	0.57299907	0.10102029	0.0542	0.0604
2007	AGRIBANK	0.05228276	19.60516	0.046935	0.75587185	0.10795923	0.085	0.1236
2008	AGRIBANK	-0.0274997	19,80819	0.04397946	0.72147695	0.12059214	0.062	0.1989
2009	AGRIBANK	0.06205777	19.99125	0.0400355	0.75215613	0.09225359	0.053	0.0688
2010	AGRIBANK	0.07073167	20.09775	0.05204668	0.78585014	0.04386014	0.0678	0.1175
2011	AGRIBANK	0.06274642	20.14745	0.05514544	0.77310641	0.11421913	0.0589	0.1813
2012	AGRIBANK	-0.0591849	20.21043	0.07252298	0.77167442	0.09176471	0.0503	0.0681
two thousand and thirteen	AGRIBANK	0.0666655	20.26578	0.08242929	0.93733115	0.09993471	0.0542	0.0604