The impact of monetary policy on the financial stability of joint-stock commercial banks in Vietnam


Authors

  • Trinh Thi Phan Lan VNU University of Economics and Business
  • Tran Thi Lien VNU University of Economics and Business
  • Huu Thi Lan Anh VNU University of Economics and Business
DOI: https://doi.org/10.57110/vnu-jeb.v5i1.382

Keywords:

Monetary policy, financial stability, joint-stock commercial banks

Abstract

This study analyzes the impact of monetary policy from the State Bank of Vietnam on the financial stability of 25 joint-stock commercial banks in Vietnam, using two variables: the rediscount rate and money supply (M2). The model employs estimation methods including Pooled OLS, Fixed Effects Model (FEM), Random Effects Model (REM), Generalized Least Squares (GLS), and two-step System GMM. The results indicate that increases in the rediscount rate and M2 money supply raise banking risks, thereby reducing financial stability. Additionally, the capital adequacy ratio positively affects financial stability, while the ratio of customer loans to total assets has a negative impact. Based on these findings, the study proposes several policy implications to enhance financial stability in Vietnam.

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25-02-2025

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How to Cite

Trinh Thi Phan Lan, Tran Thi Lien, & Huu Thi Lan Anh. (2025). The impact of monetary policy on the financial stability of joint-stock commercial banks in Vietnam. VNU JOURNAL OF ECONOMICS AND BUSINESS, 5(1), 42. https://doi.org/10.57110/vnu-jeb.v5i1.382

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