There's a familiar paradox in macroeconomic management. An economy operated with more rules designed to ensure stability and safety of the system can sometimes meet situations where those rules are no longer flexible enough to address them. Then exceptions may appear. But if rules are the foundation of policy, the way to design exceptions is a test of the quality of the institutions.
The proposal not to count certain loans for high-speed rail projects, airports and some large-scale infrastructure from the credit-growth limit has immediately drawn market interest. The initial reaction is easily predicted. Many immediately connect to the groups preparing for a new investment cycle and try to calculate who will benefit most from this mechanism.
That is a natural view of market participants. But if we stop at the corporate story, we may miss something more important. For the first time since the credit-growth limit became a familiar tool in monetary policy management, people are talking about an exception designed inside that tool itself. What is important is not just the scale of credit added to certain projects, but the shift in policy approach.
Over many years, the credit room has contributed significantly to stabilizing macroeconomy. In the context of Vietnam's developing and uneven financial markets, with varying risk governance among banks and persistent inflation pressure, controlling the growth rate of credit has helped limit cycles of rapid credit expansion, contributing to system safety. It can be said this tool is designed to serve the goal of safety and stability.
But like any policy tool, its effectiveness depends on the context in which it is used. One can look at the credit room as a tool of uniform operation. For years, every loan—whether for consumer spending, commercial real estate, exports or infrastructure investment—was placed within the same framework of credit-growth control. The advantage is simplicity, easy execution, and contributing to macro stability in a period where the top objective is to manage systemic risk. However, as the structure of the economy becomes increasingly diverse, capital needs across sectors vary more, applying the same mechanism to all loan types is like a doctor prescribing the same medicine to patients with different illnesses. What needs to change is not the treatment goal, but the degree of individualized treatment. Indeed, Vietnam's economy today is entering a very different phase from when this mechanism was formed. The economy is larger, growth expectations are higher and thus investment needs have changed markedly. Projects such as high-speed rail, airports, deep-water ports, data centers or international financial centers all share one common feature: large capital requirements, long investment horizons, and payback periods that can be measured in decades.
Meanwhile, credit room is managed on an annual cycle.
Here, a misalignment begins. A tool built to control short-term credit fluctuations must also provide financing for projects with much longer lifespans than the monetary-policy cycle. This does not mean the credit room is obsolete, but it raises a question whether a framework designed for earlier goals should be adjusted to suit the development needs of the new era.
Viewed from this perspective, the proposal to exclude certain loans from the credit-growth limit is not simply loosening credit. More accurately, this is a differentiation among types of capital. Not all lending generates the same effects on the economy. A consumer loan, a loan for commercial real estate investment, and a loan for a strategic infrastructure project all add to credit outstanding, but their long-term impacts on productivity, capacity and national competitiveness are not the same.
In that sense, policy seems to be shifting from focusing on how much credit grows to focusing more on what the credit is used for.
This is a notable change. A project with strategic significance does not automatically erase credit risk. The viability, cash flow, the borrower's financial strength and risk-management standards must still be evaluated according to professional banking principles. If development goals blur credit standards, the ultimate risk may not be confined to individual banks but could accumulate across the financial system. The shift recognizes that large infrastructure projects—such as high-speed rail, airports, deep-water ports, data centers or international financial centers—share long horizons and sizable capital needs, with payback periods measured in decades. The discussion also references trillions of dong as the scale of credit that could be added to large projects, though exact figures are not specified here.
This approach raises questions about how to define eligible loans, whether criteria will be published for predictability, and whether objective criteria can ensure consistency and verifiability over time. Once an exception appears, the incentive for more projects to seek placement into the same policy group is almost inevitable. The value of an exception lies not in the decision to create it, but in the ability to maintain its boundaries clearly and enforceably.
Another issue is the relationship between development goals and credit-control principles. A project with strategic significance does not automatically erase credit risk. The viability, cash flow, the borrower's financial strength and risk-management standards must still be evaluated according to professional banking principles. If development goals blur credit standards, the risk may spread across the financial system, not just within individual banks. This is related to the soft budget constraint phenomenon described by economist János Kornai: when a party believes it is important enough to receive eventual support, cost-control and risk-management discipline tends to degrade. Therefore, the more exceptions in policy, the more market discipline must be maintained.
The experience of many East Asian economies shows that directed credit has played an important role in industrialization. However, success did not arise from the state selecting sectors of priority, but from the quality of the accompanying institutions. The criteria for selection must be clear, the monitoring transparent, accountability complete, and especially there must exist a credible exit mechanism when a project does not meet targets. Without these conditions, directed credit can easily become preferential credit, distorting resource allocation and accumulating risk over time.
Perhaps that is why the most important thing in this decision is not the number of trillions of dong of credit that will be added to large projects, but whether Vietnam can build a mechanism in which truly meaningful long-term growth projects can access appropriate capital, while market principles and credit discipline are preserved.
Ultimately, this is not only about the credit room. This is the familiar story of public policy: balancing universal rules with the need to create exceptions for special cases. A healthy economy needs both. But a more mature institution must define the boundaries of those exceptions with transparent and consistent principles.
After all, the strength of an institution is not measured by how many exceptions it can create, but by its ability to keep those exceptions aligned with the original objectives. Perhaps that is the longer-term test of monetary policy in Vietnam's evolving development phase.
PGS Truong Quang Thong - School of Business – University of Economics Ho Chi Minh City
