Preparation of Commercial Banks in Lao PDR to implement Basel II

This research aims to study the readiness and limitations of commercial banks in the Lao PDR before turning to implement the Basel II principles by means of quantitative data analysis...

Abstract

This research aims to study the readiness and limitations of commercial banks in the Lao PDR before turning to implement the Basel II principles by means of quantitative data analysis by selecting a specific sample group of 33 commercial banks operating in the Lao PDR. The tool used to collect data is a questionnaire that includes 03 parts. Data analysis is done using SPSS software. The statistics used are frequency values, percentage values, mean values and standard deviation values. The results were as follows: In terms of Capital: the sample group has a level of arrangement at a very high level with a total average value of 3.76; Among them, the sample group is ready for lend to various sectors with the highest average value of 3.97 and the financial readiness to serve in changes in market conditions such as stock prices, interest rates, commodity prices, exchange rates with the lowest average value of 3.44. In terms of Basic Structure, Personnel: the sample group has preparedness with a total average value of 3.69; Among them, the sample group is ready to promote personnel such as participating in seminars and trainings with the highest average value of 4.03. Dissemination of information to the outside: the sample group has a high level of readiness with a total average value of 3.77; Among them, the arrangement of the general information such as the history, organizational structure, etc with the highest average value of 4.12. The results of the analysis of limitations (challenges) show that all the sample group have limitations or challenges at a moderate level with an overall average value of 3.30; Among them, the limitations in terms of skilled, capable and effective personnel have the highest average value of 3.44. From the results of the hypothesis test to compare the differences between commercial banks, it can be concluded that the P-value > 0.05 in all aspects, the hypothesis set is to accept H₀ (reject H₁), indicating that the sample group in different bank groups have preparedness to enter the use of Basel II principles, there is no difference at the 95% confidence level.