bankruptcy declaration
the stability of banking systems
weak commercial banks
State Bank of Vietnam

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The paper is developed on the basis of the traditional legal analysis method combined with the comparative method to explain and clarify the advantages of handling weak commercial banks by bankruptcy proceedings compared to measures of consolidation, merger, acquisition or compulsory transfer. The research results show that the handling of weak commercial banks, that cannot be restored or compulsory transfer by bankruptcy proceedings, will completely solve the intrinsic weakness of the commercial banking system. In the legal framework on bankruptcy of credit institutions, including commercial banks, which is stipulated in the Law on Bankruptcy and the Law on Credit Institutions, prioritizing the treatment of weak commercial banks based on the method of consolidation, merger, acquisition or compulsory transfer is not the optimal solution, because weaknesses existing in the banking system are not completely handled, but only a transfer from one commercial bank to another. For the healthy development of banking activities under the market mechanism, the handling of weak commercial banks through bankruptcy proceedings should be applied in practice as a necessary factor in ensuring the stable and sustainable development of current banking operations.



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