Central bank considers recapitalization to ensure banks’ liquidity

The State Bank of Viet Nam issued Tuesday a couple of urgent measures to assure commercial banks’ liquidity, saying it will implement recapitalization as one of the solutions.

The central bank said if commercial banks face difficulties in their current capital and do not have enough valuable papers for open market operations, or do not win auctions in the open market, they can seek recapitalization form the central bank.

The State Bank will carry out this measure by either lending with mortgage of valuable papers or lending on credit dossiers.

However, commercial banks must not use money from recapitalization to expand lending.

By H. Yen, translated by Van Thinh

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