This report presents country-case studies for Bangladesh, Georgia, and Viet Nam focusing on growing evidences in the development of financial soundness indicators to effectively monitor the financial performance of the country.
The development and analysis of financial soundness indicators (FSIs) help policy makers identify the strengths and vulnerabilities in their countries’ financial systems and take preventive action to avert a crisis or at least minimize its effects.
To assist its developing member countries to develop their FSIs, ADB launched a capacity development technical assistance project to support the participating countries of Bangladesh, Georgia, and Viet Nam in strengthening their institutional capacity to compile and analyze internationally comparable FSIs.
With the support from Investment Climate Facilitation Fund under the Regional Cooperation and Integration Financing Facility, the publication shows the diverse financial vulnerabilities of each economy. Georgia and Viet Nam have met capital adequacy standards but Bangladesh has faltered in this aspect for it requires an injection of capital into state owned commercial banks that is contingent upon improved governance. On the other hand, Georgia and Viet Nam could have been more susceptible to global economic crises than Bangladesh. A significant amount of public and private debt in Georgia is denominated in foreign currency while Viet Nam’s economic openness—largely because of rapid economic integration in East Asia—has made it vulnerable to global economic slowdowns.