Implementation of Internal Capital Adequacy and Assessment Process in Vietnamese Commercial Banks

The internal capital adequacy and assessment process (ICAAP) was first introduced in the second pillar of Basel II in 2004 to offset the deficiencies of Basel I and capital adequacy regulations in the first pillar of Basel II. This process is aimed at identifying and measuring risks generated in banks’ activities, and then provides the requirements for internal capital levels and methods to raise capital to deal with these risks. In fact, the implementation of Basel II and ICAAP in Vietnamese commercial banks has attained notable achievements, but it also revealed some major weaknesses. The purpose of this research is to evaluate the implementation of ICAAP in Vietnamese commercial banks in eight components of the ICAAP addressed by Basel II using the survey method and then to simulate the implementation of ICAAP in a Vietnamese commercial bank. From the facts and the simulation of the ICAAP framework in this study, the authors offer some suggestions for Vietnamese commercial banks to implement ICAAP effectively in their banking operations.

Business groups and their internal capital markets: the foreign and Russian experience

Modern business groups have a powerful impact on the economic development of both developed and developing countries making it relevant to study the economic foundations of the success of these institutional structures. The article provides a systematization of international and national experience in the functioning of internal capital markets of business groups that can become one of most important strategic advantages of business groups by providing member companies with “exclusive” opportunities for efficient redistribution of intragroup funds. The methodological base of the study incorporates methods of systematization as well as statistical and comparative analysis. The study shows that business groups make a significant contribution to industrial production and, representing a large part of corporate sector (in terms of number of participants, industry coverage, size of assets, profits and market capitalization), play a significant role in the economic development of various countries. Internal capital markets of business groups are used to mitigate financing constraints and rescue weak member-companies, thus, help maintain and further strengthen the positions of integrated structures. Drawing on a wide range of empirical studies, the article highlights key effects of the redistribution of group financial resources in the context of three fundamental motives of controlling owners. The study demonstrates that under the current economic conditions Russian companies affiliated with business groups are imposed with more prerequisites to use internal capital markets to overcome external financing deficit. Estimated amounts of funds involved in financial transactions with related parties confirm the thesis on the growing role of Russian business groups’ internal capital markets in corporate financing activities. Results and conclusions of this paper can be applied in practice by consultants and financial managers seeking to improve the funding of companies affiliated with both Russian and foreign business groups.

Desperate House Sellers: Distress Among Developers

Using granular data on home builder housing developments from the 2006-09 housing crisis, I show that builders spread house price shocks across geographically distinct projects via their internal capital markets. Builders who experience losses in one area subsequently sell homes in unaffected areas at a discount to raise cash quickly. Financially constrained firms are more likely to cut prices of homes in healthy areas in response to losses in unhealthy ones. Firms also smooth shocks across projects only during the crisis and not during the boom. These results together suggest firm internal capital markets spread negative economic shocks across space.

Data Mining Menggunakan Rough Set dalam Menganalisa Modal Upah Produksi pada Industri Seragam Sekolah

In a fund industry is a very important factor, mismanagement or unavailability of funds can have a negative impact on the industry, the successful shop still uses internal capital that is capital from the sale of the store itself, the sales results are not always sufficient to pay the production wage money cause late payments which adversely affect the performance of workers and the industry itself, production wage data on successful stores can be utilized by using the rough set method to find solutions to predict future production wages, The results found 57 rules of 8 reducts from 11 Equivalence Classes that provide new information that is the cause factor of not achieving capital production wages, the main factor is income followed by sewing wages, cut wages.