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Run on Vietnam's biggest bank highlights threat to economy
The Telegraph ^ | 8/27/2012 | Ian MacKinnon, Bangkok

Posted on 08/27/2012 9:02:25 PM PDT by bruinbirdman

The deliveries of truck loads of money and queues outside branches of Vietnam’s biggest lender, Asia Commercial Bank, ready to withdraw their cash almost as quickly as stocks were replenished were an eloquent expression of the fears stalking the county’s banking system.


Nguyen Duc Kien, a flamboyant tycoon from one of the country’s richest families, was arrested last week

ACB suffered a huge run on its funds by customers this week following the arrest of its co-founder, Nguyen Duc Kien, a flamboyant tycoon from one of the country’s richest families, and then the chief executive, Ly Xuan Hai, who had stepped down.

But ACB’s difficulties – which officials said were under control – are merely a reflection of wider worries about Vietnam’s fragile banking system: that the level of bad debts, the highest in south-east Asia, could imperil Vietnam’s economy.

Vietnam’s central bank said in July that the level of non-performing loans across the banking system stood at 8.6pc, double that previously acknowledged. But earlier, in June, the central bank director Nguyen Van Binh had said it was 10pc, while analysts believe the true figure could be even greater. Among smaller banks some say it might be as high as 50pc.

How, in a country of 90m people once tipped as one of Asia’s star economic performers, did the banks get in such a mess?

In a nutshell, the banks greatly expanded credit on a tide cheap government capital as it tried to weather the global financial crisis by pump priming the economy. Banks offered easy loans were to private individuals and state-owned companies just as the economy began to slow.

Property prices, enjoying such a boom in 2007 that people were queuing in the streets to snap up new off-plan offerings, dropped dramatically. In

(Excerpt) Read more at telegraph.co.uk ...


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; News/Current Events
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1 posted on 08/27/2012 9:02:31 PM PDT by bruinbirdman
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To: bruinbirdman
“The deliveries of truck loads of money and queues outside branches of Vietnam’s biggest lender, Asia Commercial Bank, ready to withdraw their cash almost as quickly as stocks were replenished were an eloquent expression of the fears stalking the county’s banking system.”

You can never have too much dong...

2 posted on 08/27/2012 9:10:31 PM PDT by decal (I'm not rude, I don't suffer fools is all.)
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To: bruinbirdman

I wonder how many other Asian banks are in trouble, even outside of Vietnam. Taiwan is about the only country properly regulated.

No wonder the price of gold is rising.


3 posted on 08/27/2012 9:10:51 PM PDT by BlackVeil
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To: decal
"You can never have too much dong... "

1 United States Dollar (USD) = 20,865 Vietnamese Dong (VND)

yitbos

4 posted on 08/27/2012 9:19:27 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman

Imagine, wheelbarrows full of dong...


5 posted on 08/27/2012 9:23:08 PM PDT by decal (I'm not rude, I don't suffer fools is all.)
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To: decal
A few weeks ago I was at my large bank in a large suburb and wanted $1000 in cash. They said they didn't have many hundreds, so would $50 be okay. Huh!!!??? You don't have enough $100 bills to cover it?

“Well now George - $124.75 isn't going to break the bank, so I want all of my money now”.

6 posted on 08/27/2012 9:24:33 PM PDT by 21twelve (So I [God] gave them over to their stubborn hearts to follow their own devices. Psalm 81:12)
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To: decal

Yes, that's Uncle Ho

The whole thing ain't $50.

yitbos

7 posted on 08/27/2012 9:34:23 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman

Buying homes in Vietnam with gold is standard practice. Vietnamese don’t trust their currency despite government repeat attempt to force ppl on it then constantly devaluing it


8 posted on 08/27/2012 9:38:03 PM PDT by 4rcane
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To: bruinbirdman
Yeah, I remember the UK Top Gear episode where the guys were given shoeboxes full of money to buy vehicles that could get them from Saigon to Haiphong - turned out the stuff was worth maybe a couple of hundred $US and all they could afford were second-hand scooters.
9 posted on 08/27/2012 9:39:06 PM PDT by decal (I'm not rude, I don't suffer fools is all.)
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To: bruinbirdman

And that is the official exchange rate; you get even more for your dollar on the unofficial exchanges.


10 posted on 08/27/2012 9:41:51 PM PDT by Army Air Corps (Four Fried Chickens and a Coke)
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To: bruinbirdman

so stimulus made it worse and is anyone surprised?


11 posted on 08/27/2012 9:43:09 PM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: ThanhPhero

Viet Ping.


12 posted on 08/27/2012 9:46:21 PM PDT by Army Air Corps (Four Fried Chickens and a Coke)
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To: bruinbirdman
What is this line? "...once tipped as one of Asia's star performers....."

If I remember right, except for a few failing factories built by the Japanese and a weak tourism business, Vietnam has been a basketcase for 40 years.

13 posted on 08/27/2012 10:00:39 PM PDT by VanShuyten ("a shadow...draped nobly in the folds of a gorgeous eloquence.")
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To: Rembrandt
Đọc này và có thể xem xét lại kế hoạch của bạn.
14 posted on 08/27/2012 10:09:09 PM PDT by BIGLOOK (72 days)
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To: decal
Imagine, wheelbarrows full of dong...

Welcome to my life.

15 posted on 08/27/2012 10:13:53 PM PDT by Lazamataz (Funny but creepy!)
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To: bruinbirdman

Thank goodness they always have communism to fall back on


16 posted on 08/27/2012 10:22:31 PM PDT by VeniVidiVici (Congrats to Ted Kennedy! He's been sober for two years now!!)
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To: VanShuyten
What is this line? "...once tipped as one of Asia's star performers....."

Guilt?

yitbos

17 posted on 08/27/2012 10:24:23 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: VanShuyten
From memory.....

In the late 1980’s Vietnam sought MFN status with the USA.

John McCain “forgave” his torturers and gave a number of speeches explaining why it was essential for us to have a powerful trade relationship with Vietnam.

The news networks went bananas supporting this idea (and stroking the always obliging McCain) - probably because they hoped Cuba would be next on the list.

The political “hook” was that unless the USA rushed in with investment and trade contracts, other less deserving nations would get there first.

It was a ludicrous misrepresentation of Vietnam's economy and government 25 years ago, and still is today.

18 posted on 08/28/2012 12:05:46 AM PDT by zeestephen
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To: bruinbirdman

I have been investigating getting my SS sent to an account in a Vietnamese bank. That project is on hold.


19 posted on 08/28/2012 6:05:39 AM PDT by ThanhPhero (Khach hanh huong den La Vang)
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To: bruinbirdman
Viêt Nam tries to keep the đông at par with the dollar. After a while it gets out of whack and the government resets. The exchange rate is not an old time "official" rate that deviates from the street rate but the government controls money creation to maintain the rate. The difference between changing money at TSN with a bank agent and at a gold shop has been miniscule. The continuous influx of North Korean $100 USD bills that are undetectable except by US Treasury equipment, which isn't shared, is enough to make for noticeable inflation in the Vietnamese economy. The price inflation is apparently severe in Hà Nội but only mild in Sài Gòn and even less in the smaller places. An old friend who has been employed in Hà Nội for several years moved down to Nha Trang and says it is nicer there and much cheaper now.
20 posted on 08/28/2012 6:50:49 AM PDT by ThanhPhero (Khach hanh huong den La Vang)
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