The experience of many countries shows that developing a credit rating industry is an effective means of improving and facilitating information transparency and capital market development. This paper argues that credit rating activities should be promoted in Vietnam. It opens with a description of the need for credit rating in Vietnam: to enhance information transparency, help attract international capital, and promote integration of its capital market into the regional capital market. Arguments are then put forward as to why Vietnam should develop domestic credit rating agencies (CRAs). To do so, however, it must bear in mind certain principles and conditions, such as guaranteeing independence and information confidentiality of the rating activities, reflected in various aspects such as the legal framework, ownership and management. The role of foreign assistance in establishing local CRAs in Vietnam is therefore emphasized.

Vietnam Economic Management Review No.1 Winter 2006 p.41-50

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