Credit freeze or credit deterioration is a term economic phenomenon in which banks refuse to lend even good borrowers, acceptance rate (LS) high.
This phenomenon implies a sharp fall in credit supply, while demand and credit is still not met, leading to very difficult businesses to access capital.
After the 2008 crisis, the United States also fell into the trap of credit deterioration and had to use more than 4,000 billion dollars from the U.S. budget and NHT.U for bankruptcy to restructure NH 800 small, compact and great support agreement raise debt ceiling agreement, but also to the early 2013, "ice" signs new credit tan.
If no ice is fast credit economy is easy to fall into the trap and then No. 2 liquidity trap. With a "liquidity trap", the abundant supply of credit, liquidity so long as capital is pumped into the market but do not have the credit, because the investors, businesses, households have lost confidence the prospects for economic recovery. Japan is a country that has experienced more than 20 consecutive years, although liquidity is trapped discount rate fell nearly 0% / year.
In VN, through the central bank statistics, the credit growth in 5 months only 3%, 25% completed the 2013 plan. System liquidity is abundant, the banks have excess capital and interbank interest rates fell sharply, low maintenance, no more sales transactions. Expression of credit deterioration is clear.
To break the ice VN credit, according to Dr. Le Xuan Nghia, to perform synchronous 4 basic solution is to lower interest rates, bad debt resolved quickly, facilitating access to finance for enterprises and banks subject to treatment weaknesses.
Ha SB LS has been implemented and get the consent of the banks. LS both deposits and loans have been pulled down lower than 2012. Most likely if inflation continues to be contained, the central bank can lower by about 0.5% / year for LS mobilization.
NPLs process starts with the promulgation of the Decree on Government VAMC. SBV Governor Nguyen Van Binh also said Congress will be expected to handle 40000-70000 VAMC billion in 2013 bad debt immediately.
As the explanatory report to the National Assembly, Deputy Prime Minister Nguyen Xuan Phuc said that in 2013 the Government requested banking sector 105.000 billion to settle bad debts. According to the report, in the remaining 7 months of the year, each month expected operating agency will pump out 40,000 billion market, plans to achieve 12% growth in credit.
Along with handling bad debts, facilitate access to capital for businesses are required to process credit thaw. When the bank moved to the VAMC bad debts and mortgage companies in NH's also become the property of the VAMC. Such companies do not have collateral to qualify bank loans, and Credit Information Center of the State Bank CIC record companies still have good credit history. If there is no mechanism for the production enterprise loans have been taken out loans from the bank's property sheet does not make sense.
So VAMC decree has established regulations is very important guarantee for organizations, businesses and individuals to borrow money from banks. The powers and functions allow the government, said VAMC may have in hand a very powerful tool to unleash the flow of credit in the economy.
Finally, to accelerate the process of credit weakness. Having done this, the last step to keep the results of the previous methods. If not treated bad debt, capital flows, only a few years off after the bad situation will soon return. Due to the weak banks continue lending to lack of control, loss of liquidity, destabilizing the whole system.
Thus, the "iceberg" credit agencies have been clearly identified and also handle specific direction. Dr. Le Xuan Nghia expected scale economies are small and the sensitivity of credit to the economy is high, "ice" melts in credit VN soon. However, the actual test, if the solution deployed icebreaker credit drastic, perhaps expectations of TS That hardly true. The risk of falling into a liquidity trap is therefore higher.
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