This paper is an attempt to empirically examine the impact of Basel Accord regulatoryguidelines on the risk-based capital adequacy regulation and bank risk management of Vietnamesecommercial banks. Our research aims to assess how Vietnamese commercial banks manage theircapital ratio and bank risk under the latest Basel Accord capital adequacy ratio requirements. Buildingon previous studies, this research uses a simultaneous equation modeling (SiEM) with three-stageleast squares regression (3SLS) to analyze the endogenous relationship between risk-based capitaladequacy standards and bank risk management. A year dummy variable (dy2013) is included in themodel to take account of changes in the regulation of the Vietnamese banking system. Furthermore,we add a value-at-risk variable developed by as an independent variable into equations of theempirical models. The results reveal a significant impact of Basel capital adequacy regulatory pressureon the risk-based capital adequacy standards and bank risk management of Vietnamese commercialbanks. Moreover, banks under the latest Basel capital adequacy regulations are induced to reducerisks and increase banks’ financial performance.
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