VIETNAM FINANCIAL SYSTEM

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VIETNAM FINANCIAL SYSTEM

In the recent years, financial system has become a key factors contribute to the development of a nation’s economy. Nowadays, money has become a problem with every parts of the society. Individuals are finding a way to use their money effectively so that they can pay for their needs in lifetime. The need of capital in companies is never be satisfied. With the firm’s enlargement, they will face the problem of maintaining cash flow and finding sources of investment in order to expand the business. We can say that financial system is the heart of the economy, which transfer the blood to organs to ensure that the whole body will operate well. This essay will demonstrate the role of providers in the financial system especially banks.

Besides bank, there are other types of financial providers such as stock exchange, insurance and financial advisers. Stock exchange provides facilities for trading securities and other financial instrument. There are two stock exchanges in Vietnam: HOSE and HNX. It is one of common channels for companies to generate capital. By issuing shares on the stock market, entities can easily raise money through IPO because listed shares are more likely acceptable for investors for its high liquidity. Besides that, issuing shares is a common way to finance a takeover and the. However, there are some costs of listing shares on the market. Especially, directors have to consider to shareholder’s expectation or shareholders will be dissatisfaction, which reducing the company’s reputation.

The role of insurance is to protect against the risks that associated with daily life and business’s operation. It is a way for people to minimize their financial risks by sharing the loss with others through the insurance company. If the contract’s value is high, to minimize profit, the insurance is shared by underwriters” who take the risk partially for receiving a part of premium in return so the customer can be protect as much as...
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