UEH announced the first Financial Conditions Index (FCI) in Vietnam

In the morning of January 31st, 2017, at Campus 59C Nguyen Dinh Chieu, the workshop: Financial Conditions Index FCI – Measurement and Application in Vietnam was organized by the School of Finance – UEH.
Attending the workshop were Prof. Nguyen Dong Phong – President; Assoc. Prof. Phan Thi Bich Nguyet – Vice President; Prof. Nguyen Trong Hoai – Vice President; Assoc. Prof. Nguyen Huu Huy Nhut – Vice President; Dr. Truong Van Phuoc – Acting Chairman of National Financial Supervisory Commission. In addition, the workshop welcomed a great number of scientists, experts, lecturers and media agencies.
Currently, in Vietnam, several economy estimating indicators, namely GDP credit growth, movement of interest rates, exchange rate, budget deficit and bad debt ratio are being announced, analyzed and evaluated separately. In reality, just only taking use of a few financial tools to reflect financial conditions will result in inexact signs, affecting the effectiveness of planning and operating economic policies or deciding on expenditure and investment.
FCI is an integrated indicator that reflects the overall financial conditions of the economy over time, as well as it’s impact on the outlook of the economy in short run and long run. In addition, financial institutions and the central banks in many countries in the world have also been trying to build FCI.
Speaking at the opening of event, Prof. Phan Thi Bich Nguyet – Vice President emphasized: “FCI is the first economic indicator in a series of indicators which has been studied and will be announced in the near future, expressing the voice and perspective of UEH on important social-economic issues. This is one of the missions and visions of UEH”.
At the workshop, on behalf of the research team of the School of Finance, Assoc. Prof. Nguyen Khac Quoc Bao – Dean of School of Finance announced the research result of FCI in Vietnam in the period of Q4/2002 – Q1/2017. The research team estimated the FCI based on selected models and methods and standardized data according to international practice and reliable data (datastream). Notably, the team’s findings have shown that the FCI closely reflects the development of the financial system and the real economy.
Therefore, this index will be very useful for policy-makers, business-owners, investors and the public departments in understanding and forecasting the economic outlook by identifying signs of tightening or loosening of financial conditions, and then provide necessary and timely regulatory policies for the government or help to make decision in financing, investment, consumption and savings for enterprises, investors and the general public.
Having an important meaning and widespread potential in application, the research team of the UEH plan to announce this index every quarter for various partners; as well as continuously updating with better results to become a macro-policy recommendation indicator from UEH.
The workshop received consensuses and constructive criticism from experts and partners.