Illustrative image (Source: VNA)

Hanoi (VNA) – The financial integration of the ASEAN Economic Community (AEC) will help Vietnamese companies in the banking, insurance and securities sectors to increase their market share and involve deeper into regional markets, said a Finance Ministry official.

Addressing a workshop on AEC: opportunities and challenges for Vietnam’s financial market held in Hanoi on November 27, Le Thi Thuy Van from the Institute of Financial Strategy and Policy under the Ministry of Finance said t he removal of barriers and differences between countries in the AEC will create a fair playing field for local and foreign companies and attract more foreign capital to meet domestic demand on capital.

The involvement of foreign investors in the management of banking, insurance and securities enterprises is an important factor to quickly improve the administration level, said Van.

The presence of foreign investors in Vietnam’s financial market will open up opportunities for improving quality and diversifying financial services, she said, adding that the free flow of capital in the AEC will also have positive impacts on the extensive and deep development of financial systems.

Fulfilling commitments when the AEC takes effect will pose a lot of challenges for Vietnam’s financial market because the county’s financial market infrastructure and size is relatively small and incompetent in comparison with regional countries.

Pham Tuan Anh, Deputy Head of the Department of International Cooperation, said the first step is to complete institutions to carry out commitments in ASEAN in all fields on finance like accounting, securities, insurance and others.

Van shared the participation of big financial institutions and companies in the market will increase competition in the local market and Vietnam will also have to control the flow of capital in and out of the country.

The increase of capital flow will cause concerns for the bubble of asset value, she said, adding the free flow of capital will increase the risk of sudden capital withdrawal, especially at a large scale that will be a source of instability for the financial market, Van said.

The AEC includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam with a population of more than 600 million people and a combined GDP of more than 2 trillion USD.-VNA