Vietnam to increase bank safety ratios next year

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Vietnam's bank safety ratios will be raised next year, central bank Governor Nguyen Van Giau said, ahead of a planned increase in the capital adequacy requirement in October.

Safety ratios will be lifted gradually to a "higher" point from Jan. 1, Giau told reporters in Hanoi Friday. Capital adequacy is one of the safety ratios, and Giau didn't specify which would be increased.

The State Bank of Vietnam in May asked financial institutions and banks to raise the capital adequacy ratio to a minimum 9 percent by Oct. 1 from 8 percent. The move, which is aimed at ensuring the safety of financial institutions, came as policy makers urged banks to boost lending to support economic growth.

A group of lenders has proposed a delay in the Oct. 1 deadline because banks were given too little time to meet the new requirement, Thoi Bao Kinh Te Vietnam newspaper reported Thursday. Giau said he didn't think the new regulation would be taking effect too quickly.

Concern that banks will be forced to sell equities to meet capital adequacy requirements sent Vietnam stocks to their lowest level since Dec. 18 Thursday. The benchmark VN Index was the worst performer among main global indexes, falling 3.2 percent to 448.4. The gauge rose 1 percent to 452.73 Friday.

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