Status quo of legal provisions on securities investment activities of commecial banks and recommendations

Abstract

Risk is one of the characteristics of securities investment activities carried out by commercial banks. Under the current law of  Vietnam, a commercial bank may directly invest in stocks with some limitations or make indirect securities investment activities through its subsidiaries. Some inadequacies of the law on this issue are the lack of specific provisions on conditions and limitations of securities investment activities which results in cross-ownership in the financial system or insufficient control of specific activities, etc. The article, based on the assessment of the current law, makes some specific recommendations for  amending and supplementing the current towards a more effective management of the mentioned activities, respectively establishing a strict risk management mechanism, tightening the conditions for capital contribution and share purchase to establish securities companies, and supplementing provisions on "financial group”.