Until a few years ago, Vietnam was one of the world's hottest emerging markets. Now it faces an urgent task: fix a beleaguered banking system or watch its economy continue to slip behind faster-growing neighbors, The Wall Street Journal reported. Piles of bad loans following the financial crisis have dragged down growth in Vietnam and left banks weakened and reluctant to lend.

U.S. hedge fund Elliott Advisers LP is suing Vietnamese state-run shipbuilder Vinashin in the U.K. High Court, according to a filing seen by The Wall Street Journal. Vinashin defaulted on a $600 million syndicated loan last December, when the first repayment of $60 million was due. Other investors in the loan, which was arranged by Credit Suisse AG in 2007, include Dublin-based Depfa Bank PLC and Malayan Banking Bhd., as well as Credit Suisse.

The National Financial Monitoring Committee President has emphasized the need to restructure Vietnam’s commercial banking system if the country did not want to lag behind the rest of the world, VOV News reported. Vu Viet Ngoan told reporters on the sidelines of the ongoing National Assembly meeting in Hanoi that Vietnam’s financial system was rated as “weak” in the pre-crisis period and that the world was now rushing to restructure the global financial system in order to increase working capacity and reduce risk.

Frustration over Vietnamese state-run shipbuilder Vinashin's failure to repay loans it defaulted on last year is intensifying among creditors, potentially jeopardizing Vietnam's plans to draw more investment to improve its infrastructure and reduce the bottlenecks that threaten its growth, The Wall Street Journal reported. The problems at Vinashin point to the risks of investing in what, on the face of it, is one of the world's most attractive emerging markets.

Members of the Vietnamese government will not be punished for problems at a state-owned shipbuilder whose debts threatened the country's global financial reputation, a top official said Monday, Agence France-Presse reported. Deputy Prime Minister Nguyen Sinh Hung made the comments to the National Assembly, where some lawmakers last year said the government should be held accountable for the scandal at Vinashin (Vietnam Shipbuilding Industry Group).

Malaysian conglomerate The Lion Group has blamed problems at Vietnam's scandal-hit shipbuilder Vinashin for the failure of a multi-billion-dollar joint venture, Dow Jones Daily Bankruptcy Review reported on an Agence France-Presse story. The $9.8 billion project by state-owned Vietnam Shipbuilding Industry Group, or Vinashin, and Lion would have included a steel mill, power plants and a sea port in the southern Vietnamese province of Ninh Thuan. Vietnamese officials said last month that the project's investment license had been revoked because investors didn't fulfill their commitments.

Vietnam's leaders unveiled measures aimed at curbing soaring inflation rates Thursday, even as residents worried over electricity- and fuel-price increases that are sending energy costs as much as 24% higher, The Wall Street Journal reported. It's a time of spreading unease about the stability of this fast-growing economy. Communist-run Vietnam has one of Asia's worst inflation problems, with a consumer price index that hit a two-year high of 12.31% this month.

Vietnam's inflation posted another double-digit rise ahead of the Lunar New Year, adding pressure on authorities to raise interest rates to slow the nation's growth and curb pressure on its currency, The Wall Street Journal reported. The nation has struggled to deal with several economic stresses, fueling concerns about the government's ability to manage fiscal policy as the trade deficit balloons and the Vietnamese dong remains persistently weak, bucking a trend across the region.

Vietnam's nearly-bankrupt shipbuilder Vinashin yesterday said that it will be allowed to take out interest-free loans, in another concession after it reportedly defaulted on a debt to international lenders, Agence France-Presse reported, according to Dow Jones Daily Bankruptcy Review today. Vinashin said Prime Minister Nguyen Tan Dung had authorized companies, workers, and former employees of Vinashin group to borrow money at zero percent interest from the state-owned Development Bank of Vietnam.

State-owned shipbuilder Vinashin's default on a $600 million loan late last week is just the latest crisis challenging Communist-run Vietnam's ability to get its economy under control after years of pell-mell growth and spiraling inflation, the Wall Street Journal reported today. Last week's default by shipbuilder Vinashin could be a make-or-break moment for Vietnam, say some analysts. Above, a ship is worked on at Vinashin's Nam Trieu shipyard in Hai Phong.