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Banking Reform in the Lower Mekong Countries

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  • Mr. Olaf Unteroberdoerster

Abstract

This paper reviews recent banking reform efforts in the lower Mekong countries (LMCs), comprising Cambodia, the Lao People's Democratic Republic, and Vietnam. Linked by close economic and cultural ties, the three LMCs face the dual challenge of economic development and transition to market-based economies. Two-tier banking systems were formally introduced in the late 1980s. However, state-owned banks with weak balance sheets continue to dominate the banking systems of Vietnam and Lao P.D.R. Cambodia's main challenge is to reconstruct a banking system after decades of civil strife. Based on progress made and brief cross-country comparisons, the paper identifies key challenges and options for further reform.

Suggested Citation

  • Mr. Olaf Unteroberdoerster, 2004. "Banking Reform in the Lower Mekong Countries," IMF Policy Discussion Papers 2004/005, International Monetary Fund.
    • Handle: RePEc:imf:imfpdp:2004/005
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    References listed on IDEAS

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    1. Khaled Sherif & Michael Borish & Alexandra Gross, 2003. "State-owned Banks in the Transition : Origins, Evolution, and Policy Responses," World Bank Publications - Books, The World Bank Group, number 14851, December.
    2. Dado, Marinela E. & Klingebiel, Daniela, 2002. "Decentralized credtor-led corporate restructuring - cross-country experience," Policy Research Working Paper Series 2901, The World Bank.
    3. Michael S. Borish & Millard F. Long & Michel Noël, 1996. "Lessons from Bank and Enterprise Restructuring in the Transition Economies of Europe and Central Asia," The World Economy, Wiley Blackwell, vol. 19(1), pages 39-62, January.
    4. Tang, Helena & Zoli, Edda & Klytchnikova, Irina, 2000. "Banking crises in transition economies : fiscal costs and related issues," Policy Research Working Paper Series 2484, The World Bank.
    5. Ms. Edda Zoli, 2001. "Cost and Effectiveness of Banking Sector Restructuring in Transition Economies," IMF Working Papers 2001/157, International Monetary Fund.
    6. John Bonin & Bozena Leven, 2001. "Can State-owned Banks Promote Enterprise Restructuring? Evidence from One Polish Bank's Experience," Post-Communist Economies, Taylor & Francis Journals, vol. 13(4), pages 431-443.
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    Cited by:

    1. Koji Kubo, 2013. "Myanmar's two decades of partial transition to a market economy: a negative legacy for the new government," Post-Communist Economies, Taylor & Francis Journals, vol. 25(3), pages 357-370, September.
    2. Kristina Spantig, 2015. "The role of the financial sector in enhancing economic growth in the Lao People’s Democratic Republic," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 22(1), pages 67-98, June.
    3. Sok Heng Lay & Makoto Kakinaka & Koji Kotani, 2010. "Exchange Rate Movements in a Dollarized Economy: The Case of Cambodia," Working Papers EMS_2010_18, Research Institute, International University of Japan.
    4. Kubo, Koji, 2012. "Restructuring the state budget system for disinflation and exchange rate unification in Myanmar," IDE Discussion Papers 320, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. World Bank, 2004. "Vietnam Development Report 2005 : Governance," World Bank Publications - Reports 15650, The World Bank Group.
    6. Hongyi Chen & Lars Jonung & Olaf Unteroberdoerster, 2014. "Lessons for China from Financial Liberalization in Scandinavia," Asian Economic Papers, MIT Press, vol. 13(1), pages 1-44, Winter.
    7. International Monetary Fund, 2006. "Lao People’s Democratic Republic: Selected Issues and Statistical Appendix," IMF Staff Country Reports 2006/398, International Monetary Fund.
    8. Menon, Jayant, 2008. "Cambodia's Persistent Dollarization: Causes and Policy Options," Working Papers on Regional Economic Integration 19, Asian Development Bank.

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