BANKING ACADEMY ADVANCE PROGRAM - FACULTY OF BANKING ********** GRADUATION THESIS TOPIC: APPLYING ETHICAL STANDARDS AT VIETNAMESE BANKS Student : Tran Ngoc Hung Student ID : 23A4010895 Class : K23CLC NHA Academic year : 2020 - 2024 Supervisor : Assoc. Nguyen Minh Phuong Hanoi, May 2024 i DECLARATION I hereby declare that the graduation thesis entitled "APPLYING ETHICAL STANDARDS AT VIETNAMESE BANKS" is my own research work under the scientific guidance of Assoc. Nguyen Minh Phuong, and this graduation thesis was submitted to the Faculty of Banking, Banking Academy of Vietnam. I warrant that the information in this study is presented truthfully, they have not copied any material and have not published this content anywhere, all references are fully cited and transparent according to regulations of Banking Academy.
I take full responsibility for my declaration. Hanoi, May 2024 Declarant Tran Ngoc Hung ii ACKNOWLEDGEMENT First and foremost, I would like to express my deep gratitude to the Associate Professor, Ph. Nguyen Minh Phuong for enthusiastically guiding me throughout the research process and completing my graduation thesis. I would also like to send my sincere thanks to the teachers and staff in the Department of Banking, the Advance Program along with the teachers and staff in the Banking Academy for their love in imparting knowledge during the four years of studying at the Academy.
The knowledge I have learned is not only the foundation for the graduation thesis research process but also a valuable asset for me to confidently enter life. During the process of researching and writing the thesis, due to limited theoretical level as well as practical experience, the report cannot avoid considerations. I look forward to receiving your comments and suggestions to improve my thesis, and also provide experience for future research. Finally, I would like to sincerely thank and wish you good health and greater success in this noble career of cultivating people.
Thank you very much! Hanoi, May 2024 Student Tran Ngoc Hung iii LIST OF TABLES Table 2. Moral hazard in capital mobilization operations at banks. Moral hazard in credit operations at Vietnamese 38 banks. Ethical risks in treasury operations, card operations 50 and other operations at banks Table 2.
Commercial banks whose employees participated in 57 the survey Table 2. Specific information table about the opinions of employees 60 participating in the survey LIST OF DIAGRAMS Diagram 2. Methods of propagating the Ethical standards at banks 59 Diagram 2. Main difficulties 62 Diagram 2.
The level of effectiveness that helps improve the 63 application of the ethical standard TABLE OF CONTENT DECLARATION. ii LIST OF TABLES. iii LIST OF DIAGRAMS. Necessity of the research topic.
Subject and scope of research. Structure of the research paper.6 CHAPTER 1: OVERVIEW OF BANKING ETHICAL STANDARDS. Some basic related concepts. Concept of professional ethics.
Banking business ethics. Moral risk in banking business. Set of standards and codes of ethics for bank officials. Experience in building ethical standards at commercial banks around the world.
Bank of America Ethical standard(2013). Japan Financial Services Agency (FSA). Ethical standards of the Turkish Banks Association. Central Bank of Ireland.
Ethical standard of ANZ commercial bank (The Australia and New Zealand Banking Group Limited). Ethical standard of Bangkok bank. Toronto Dominion Bank/Canada ethical standards. Ethical standard of Deutsche bank (Germany).
Central Bank Malaysia ethical standards. Lessons learned in developing an Ethical standard for Vietnamese bank officials. About the structure of the ethical standards. About the content of the ethical standards.
Some other notes when developing a ethical standards .30 CONCLUSION OF CHAPTER 1 .30 CHAPTER 2: CURRENT STATUS OF APPLYING ETHICAL STANDARDS IN VIETNAMESE BANKS. The current situation of ethical violations at Vietnamese commercial banks in the period of 2021-2023. The current situation of ethical violations in professional activities at commercial banks. Consequences from ethical violations in business activities of Vietnamese banks.
Consequences for commercial banks. For the State Bank. Consequences for customers. Great impact on the economy.
Survey on professional ethics and behavior at Vietnamese banks. Evaluate the application of ethical standards. Problems regarding the application of ethical standards. Causes of shortcomings in the application of ethical standards .71 CONCLUSION OF CHAPTER 2 .73 CHAPTER 3: SOLUTIONS TO ENHANCE THE APPLICATION OF ETHICAL STANDARDS AT VIETNAMESE BANKS.
Set goals and values. Developing policies and procedures. Training and enhancing ethical awareness. Building an ethical cultural environment, improve communication and create motivation.
Establishing a mechanism to monitor, evaluate and handle violations. Evaluating performance and improve continuously. Harmonizing the application of banking professional ethical standards in Vietnam with professional ethical standards in international banks .83 CONCLUSION OF CHAPTER 3 .87 Appendix 1: Personal information. Necessity of the research topic During the country's economic development process, the Vietnamese banking system has continuously improved its competitiveness and affirmed its important role in the economy.
However, the reality of banking business has continued to reveal many inadequacies, including weakness in management and lack of necessary tools, contributing to increasing the risk of moral hazard and causing problems. financial loss, and at the same time reduce the reputation of banks. Specifically, there have been many cases of ethical violations related to risks in the banking and finance sector recently. This phenomenon is becoming increasingly serious and complicated, creating major consequences for the financial and monetary sector, reducing society's trust in banking industry officials and affecting the image along with the reputation of the banking sector.
The causes of violations of professional ethics by bank officials have many factors, first of all due to the consequences of the market economy, the decline in ethics and lifestyle of some bank officials. When assigned tasks, they took advantage of their positions and duties to take advantage of the assets of customers and banks. In addition, risk management in general and moral risk in particular in banks lack professionalism and practical experience, leading to ineffective risk prevention. The problem "How to effectively apply ethical standards in banks ?" is always a challenge for state management agencies and bank management levels, requiring a thorough research project.
At present, regulatory agencies have issued a number of documents related to ethical risk control, as well as the application of ethical standards and internal audit functions of banks. However, these documents do not clearly stipulate ways to thoroughly promote ethical standards and codes of conduct for bank officials in particular and banks in Vietnam in general, as well as how to build, develop, organize and supervise the implementation of regulations related to ethical standards of banking officers at all Vietnamese banks. Currently, only a few banks have developed 2 and used internal regulations on ethical codes in the form of Corporate Culture Manual or Culture of Conduct, but they have not been disclosed to the public. Therefore, to optimize the application of ethical standards in banks' business activities in numerous banks in Vietnam, as well as develop effective Ethical standards for Vietnamese bank officers, it is necessary and of practical significance.
send off high. This is an important reference for managers and policymakers in the banking industry, as well as bank administrators and executives. Research overview - Research projects in the country Currently, violations of ethical standards in the banking sector are increasing. There have been a number of articles reflecting or warning about ethical risks in the banking industry and some ethical rules for important positions in banking.
Organizations such as Commercial Banks and the Vietnam Banking Association have issued internal documents regulating and guiding staff implementation such as the Ethical standards of the Vietnam Banking Association (2014); Vietcombank Cultural Handbook of Vietnam Joint Stock Commercial Bank for Foreign Trade (2010); Code of professional ethics of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) (2009); Corporate culture handbook of Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) (2009); Agribank Cultural Handbook of Vietnam Bank for Agriculture and Rural Development (Agribank) (2011) and some other Joint Stock commercial banks such as Lien Viet Post Office; Asia Commercial Joint Stock Bank…. However, these regulations are often issued to meet organizational requirements, create differences or follow the trends of other organizations, but do not demonstrate a deep awareness of the importance of standards. ethics in raising awareness and adjusting employee behavior. In addition, when developing codes of ethics for different industries, leading agencies often issue general guidance documents on how to develop and implement them.
These agencies are responsible for issuing guidance documents with model rules to promote implementation and monitoring. 3 However, in Vietnam there are currently no projects or studies on the effective application of ethical rules in the banking industry in general, as well as for officers, employees and workers working in banks. Vietnamese goods in particular. Therefore, researching and effectively applying ethical rules in Vietnamese banking becomes necessary, with both theoretical and practical significance to meet practical requirements.
- Research projects abroad In Toronto Dominion Bank's "Code of Conduct and Ethics for employees and directors," guidance is provided on how to apply the ethical standards when a bank employee or director has to make a difficult business decision. This code includes many provisions, focusing on the following aspects: legal compliance, integrity of bank officers, resolution of conflicts of interest, information security, disclosure of bank information. banking, building a working environment and complying with the code. Each clause has specific instructions on what bank employees are allowed or not allowed to do.
"Code of Banking Practices" (2003), the Australian Banking Association has clearly stipulated the responsibilities of bank staff in advising and providing information related to banking products and services to customers. Specifically, in each transaction a customer needs, bank staff must clearly provide and present information to the customer. This can be considered a detailed set of rules on conducting banking business for employees. The Australian Banking Association also regularly adjusts and updates this code from time to time.
The research article "Ethics codes and codes of conduct as tools for promoting an ethical and professional public service" by Stuart C. Gilman (2005), focuses on the relationship between the organization's working environment and the ethical standards. Professional ethics, with two specific cases mentioned: applying the professional code in the current working environment of the enterprise and applying the professional code to change and improve the working environment of the enterprise. 4 Furthermore, many banks around the world have issued their own codes of ethics.
Most banks have developed codes of ethics that apply to all employees in the bank. However, there are also some banks that have established separate sets of rules for each group of officers. For example, ANZ Bank has ethical standards for employees and separate ethical standards for Directors; Bank of England also has separate codes of ethics for retail bankers and corporate bankers, focusing on the unique characteristics of each position. These sets of rules vary in detail, however, most focus on key aspects of a bank officer's job, including rules on customer service, human resource development, and job creation.
value for shareholders, teamwork, respect for colleagues, initiative in work and ethical requirements of bank officers. The study will clarify the possible causes of failure in adopting a new code, the factors that support its success, as well as the principles in developing an ethical standard. In summary, the following study will provide detailed and complete guidance on successfully developing and applying an ethical standard in a business. Overall objectives: Based on synthesizing the theoretical basis and international standards on professional ethics of banking staff, this study focuses on clarifying basic concepts related to aplying the banking ethics from many sources, different aspects and perspectives, to demonstrate the importance of banking professional ethics to the economy.