Bank of the People's Democratic Republic of Laos
| Headquarters | Vientiane |
| founding | 1975 |
| president | Somphao Phaysith |
| country | Laos |
| currency | |
| ISO 4217 | LAK |
| Website | |
| Renaming and reforming: October 14, 1995 | |
| List of central banks | |
The Bank of the People's Democratic Republic of Laos ( Lao ທະ ນາ ຄານ ແຫ່ງ ສ ປ ປ ລາວ , English Internationalized Bank of the Lao People's Democratic Republic , BOL for short ) is the central bank of Laos .
The current central bank was founded in 1975 as part of the nationalization of the banking sector after the Lao People's Revolutionary Party came to power . The head office is located in the capital Vientiane . The bank is managed by a governor and three deputy governors who, together with the finance and economics ministers, form an executive committee.
Historical development
Establishment of the People's Democratic Republic of Laos (1975)
With the proclamation of the People's Democratic Republic of Laos in 1975 by the Lao People's Revolutionary Party (LRVP), the banking system was nationalized. The Viengxai Central Bank was merged with the Lao National Bank . The aim was to accelerate the process of economic development. A high degree of centralization by economic decision-makers, strict regulation and little trust in the market or prices were invoked.
The State Bank of Laos was created with its headquarters in Vientiane . She was responsible for all domestic banking operations and financed state-owned companies. In addition, the Banque pour le Commerce Extérieur Lao (BCEL) was founded, whose task was to carry out international transactions. Furthermore, she was responsible for the issuance of the currency. As the war was over, it mainly gave loans to agriculture and industry for the country's economic recovery.
First five-year plan (1981–1985)
In order to bring the economy and the strong agricultural sector under state control, systems of price control and subsidies were introduced as part of the first five-year plan . In addition, trade was regulated and rice-growing was independent from other countries. The public sector and the distribution systems were continuously expanded.
Overall, the government achieved economic development in terms of rice production, but this was accompanied by high inflation, large budget and trade deficits, overvalued exchange rates and growing dependence on foreign capital.
Reform measures of the banking system (1988 and 1990)
Due to the effects of the first five-year plan, the government was forced to revise its development strategies. This led to a series of reform measures.
In March 1988, the Council of Ministers approved Decree No. 11 reforming the Lao banking system with the aim of ending the state monopoly on banks. It was an attempt to separate the functions of a commercial bank from the central bank.
From 1990 it was authorized to regulate, permit and monitor financial services. It also holds the country's currency reserves. As a result, the State Bank of Laos was renamed Bank of the Lao People's Democratic Republic on October 14, 1995 .
The BCEL , responsible for foreign trade, became an independent commercial bank. Furthermore, two branches of the former State Bank of Laos split up and were also converted into commercial banks, while four other financial institutions became regional banks.
construction
The Lao Central Bank is headed by a board of directors consisting of the governor of the bank and his three deputies. Important people from the various economics and finance ministries also sit on this supervisory board.
The structure of the Landesbank can be described as central and uniform. It is divided into separate, more or less regional directorates.
A purely geographical breakdown is due to the division into two areas for northern and southern Laos, each with two main branches, in the northern provinces ( Oudomxay and Luang Phrabang ) and the southern provinces ( Champasack and Savannakhet ). These four branches have their own supervisory boards, which are composed of directors and their deputies. However, they do not have sole power of disposal, but are subordinate to the supervisory board of the central bank itself.
The central bank includes the Laotian stock exchange regulator and the state printing plant, which is also located in Vientiane.
Governor and his deputy
- Somphao Phaysith, governor
- Khamvong Thipphavong, Deputy Governor
- Sonexay Sitphaxay, Deputy Governor
- Vathana Dalaloy, Deputy Governor
As of January 25, 2016
tasks
The main task of the Bank of the People's Democratic Republic of Laos is to maintain monetary control and to promote the development of the financial markets. The aim here is to keep the inflation rate low, but at the same time to ensure the necessary continuous credit growth to finance the development of Laos. High interest rates, reserve requirements and government bonds are some of the means the bank has at its disposal to achieve its goals.
Further tasks are:
- Developing a monetary policy plan. After confirmation by the National Council, it is the task of the BOL to put this plan into practice.
- The custody and management of the government's foreign exchange reserves,
- as well as the administration and regulation of the money supply.
- Representing the government in international financial organizations as well as signing and participating in financial and currency agreements with other countries.
Supervisory board
The Board of Directors of the Bank of the People's Democratic Republic of Laos is the highest body in the central bank. This consists of 7 to 9 members, including the chairman and the vice-chairman.
structure
The Supervisory Board of the Bank of the People's Democratic Republic of Laos consists of:
- President (= governor) of the Bank of the People's Democratic Republic of Laos as vice-chairman
- Vice Prime Minister Lao People's Democratic Republic as chairman
- Finance Minister as Vice Chairman
- Vice-President of the Bank of the People's Democratic Republic of Laos as a member of the Supervisory Board
- Other members from the Ministries of Agriculture, Industry, Commerce, Banking and Finance
Rights and obligations
The Board of Directors reviews and comments on the monetary, exchange rate and credit policy proposed by the Governor of the Bank of the Lao People's Democratic Republic. It also determines the relationship between assets, mandatory funds and similar services of the bank. It is also the responsibility of the Board of Directors to select methods of calculating such obligations so that they can be used as a standard by other commercial banks.
It also enacts regulations on the interest rate on deposits, loans and the purchase of discounted bonds. He elects an auditor who audits the activities of the Bank of the People's Democratic Republic of Laos and is responsible for the annual report, the annual balance sheet and the profit and loss account.
In general, the board acts as a secretariat between the Ministry of Finance and the monetary aspects.
Meeting of the supervisory board
The supervisory board is convened at least once every two months by the chairman or by two members of the supervisory board. In order for such a meeting to take place, half of the members must be present. Decisions are made through a simple majority procedure or, in the event of a tie, by the chairman.
governor
Appointment of the governor
The governor, who is a member of the Lao government, is appointed and dismissed by the Prime Minister of the state and by the National Assembly.
Rights and obligations
The office of governor comes with a number of rights and duties. The President is responsible for all monetary decisions as well as for decisions that affect the bank as such. In addition, he is responsible for the management of the bank's operations and the supervision and control of the commercial banks and financial institutions that are under the supervision of the Bank of the Lao PDR. The examination and evaluation of monetary, exchange rate and interest rate policy is also the responsibility of the President. He has the power to propose the lieutenant governors to request their dismissal or transfer. In order to improve the organizational processes within the bank, he is permitted to employ administrative staff. In all his actions as a public official, he is bound by the applicable law of the state of Laos.
Incompatibilities
The governor of the bank may not be the owner, president or member of the board of directors of a commercial bank in parallel with his work at BOL (Bank of the Lao PDR).
Money laundering problem
Like many other countries, especially in Southeast Asia , Laos is struggling with money laundering . Because of the ailing education system of the state and the associated lack of enlightenment among the inhabitants of Laos in remote provinces, it is easy for foreign groups with criminal intent to gain a foothold in Laos and do money laundering. Another factor that favors this development is the high level of corruption in the country itself.
Efforts of the BOL
On May 14, 2007, the establishment of an anti-money laundering unit was completed by the BOL supervisory board. This unit would from now on lead the fight against money laundering on Laotian soil. Part of this work is above all information gathering and education of the partially ignorant citizens of Laos about the effects that support for money laundering could have. Furthermore, in July of the same year, Laos joined the Asia Pacific Group on Money Laundering , on the one hand to receive support from abroad, but on the other hand to ensure that the problem was combated beyond its own borders.
The work of the established unit amounts to disseminating and processing the information obtained through research and interaction with citizens and other financial institutions, including commercial ones. It is in constant contact with the Executive Committee of the Lao Central Bank and is subject to their decisions and guidelines. It is not intended that this unit take legal action itself, but merely forwards information to the associated bodies.
In July 2011, the APG published a 220-page document in which it described an initial investigation into Lao’s efforts to combat money laundering and terrorist financing. The document included detailed analysis as well as recommendations from the organization on how Laos could stem the problem. A quote from the document describes the situation as follows:
"There is a lack of awareness of AML / CFT international standards and the required implementation measures, which is compounded by a lack of dedicated resources and insufficient political commitment to undertake the required reforms."
" There is a lack of awareness of international standards, as well as the implementation of the necessary measures of the AML / CFT [Anti Money Laundering and Combating the Finance of Terrorism], which is due to a lack of targeted allocation of resources and insufficient political commitment to the issue. " [freely translated]
Above all, the political leadership itself as well as the responsible organs of the BOL organizations were accused of insufficient allocation of resources and simple underestimation of the problem.
On February 24, 2015 a further tightened law was passed, which should counteract the developments in the country. The main aim of this law is to apply the obligation to report suspicious activities to one's own citizens as well. Citizens are also obliged to actively participate in the fight against money laundering and terrorist financing and to support the unity of the BOL.
literature
- Paul J. Smith: Terrorism and Violence in Southeast Asia: Transnational Challenges to States and Regional Stability. ISBN 0-7656-1434-0 , p. 9 ff. "Money laundering"
- OAV: Asia-Pacific Business Manual 2011/2012. Chapter: Laos.
- Martin Stuart-Fox: Historical Dictionary of Laos. Scarecrow Press, 2008, ISBN 978-0-8108-6411-5 , chapter "Banking".
- Mya Than, Loong-Hoe Tan: Laos' Dilemmas and Options: The Challenge of Economic Transition in the 1990s. Institute of Southeast Asian Studies, 1996, ISBN 981-3055-11-1 .
- Chwee Huat Tan: Financial Sourcebook for Southeast Asia and Hong Kong. World Scientific, 2008, ISBN 978-981-4493-54-3 , chapter "Laos".
Web links
- Official Homepage of the Bank of the Lao PDR (la, en)
- Official Homepage of the Asia / Pacific Group on money laundering
- Financial Action Task Force on Money Laundering
Individual evidence
- ↑ Viengthong Keomanisy: Bank of the Lao PDR - History. P. 2 , accessed on January 23, 2016 .
- ^ A b c Mya Than, Loong-Hoe Tan: Laos' Dilemmas and Options: The Challenge of Economic Transition in the 1990s . Institute of Southeast Asian Studies, 1996, ISBN 981-3055-11-1 , pp. 23 .
- ^ A b Martin Stuart-Fox: Historical Dictionary of Laos . Scarecrow Press, 2008, ISBN 978-0-8108-6411-5 , pp. 22-23 .
- ^ Laos The Banking System. Retrieved January 23, 2016 (republication from The Library of Congress Country Studies and the CIA World Factbook).
- ↑ a b Chwee Huat Tan: Financial Sourcebook for Southeast Asia and Hong Kong . World Scientific, 2000, ISBN 981-4493-54-6 , pp. 19-20 .
- ^ The Bank of Lao PDR (BOL). (No longer available online.) Archived from the original on March 11, 2014 ; accessed on January 24, 2016 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ Bank of the Lao PDR: Structure BOL. (PDF) (No longer available online.) Archived from the original on January 24, 2016 ; accessed on January 24, 2016 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ Government. In: www.bol.gov.la. Retrieved January 24, 2016 .
- ^ Prime Minister of Lao PDR: Decree on the Organization and Activites of the Bank of Lao PDR. (PDF) April 6, 2000, p. 2 , accessed January 27, 2016 .
- ↑ a b c d e Decree Law. (PDF) (No longer available online.) Archived from the original on March 22, 2013 ; accessed on January 24, 2016 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ A b c d e Law on the Bank of the Lao PDR. (PDF) vientianetimes.org.la, 1995, accessed January 24, 2016 .
- ↑ Lilley, Peter: Origin of criminal activities and money laundering in Asia. (PDF) 2006, pp. 11,12,7,3 , accessed on February 8, 2016 (English).
- ^ Michaelis, Alfred: Corruption in Laos (peace advice). In: www.ag-friedensforschung.de. July 29, 2014, accessed January 25, 2016 .
- ↑ Oliver Weiß: TI-Germany: Tabular ranking (Laos: Rank 145). (No longer available online.) In: www.transparency.de. Archived from the original on March 4, 2016 ; Retrieved January 25, 2016 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ a b Approval for the establishment of the AMLIU (section "Right and Duties). (PDF) Retrieved January 25, 2016 .
- ^ Asia / Pacific Group On Money Laundering. In: apgml.org. Retrieved January 25, 2016 .
- ^ Asia / Pacific Group On Money Laundering: Mutual Evaluation Report. Anti-Money Laundering and Combating the Financing of Terrorism. July 2011, accessed January 25, 2016 .
- ↑ DFDL-Danyel Thomson: New anti-money laundering law in the Lao PDR | Lexology. Retrieved January 25, 2016 .
