Banking on the Future, Interpreting the Present, Living in the Past. Vietnamnese Banking in the Early 1990s.

Vietnam has opened up towards the rest of the world and made considerable progress towards a market economy. The process challenges the institutional capacity of the country. In this context the reorganization of the banking system is central. The paper discusses banking in Vietnam as it appears in eht early 1990s. The analysis is based on statements from agents and observers of the system - bankers, central bank officials and others. The paper thus provides an example of how interviews may be used as a source of data. The paper accounts for a number of deficiencies in the banking system: its inability to efficiently intermediate financial resources, the poor functioning of the payment system, the flawed interest rate structure, the considerable repayment problems and the general lack of banking profitability. The purpose of transformation is to take advantage of the country's growth potential; Vietnam is banking on the future. But the agents involved must assimilate these new ideas with the current situation, where many of the new formal and informal rules are not yet well established; the agents try to interpret the present context. A problem in this interpretation is that the legacy of the old structure lingers on; the agents are in many ways still living in the past.