| Deposit insurance system is one kind of system arrangement that establishes special deposit insurance corporation to protect the legal benefit of the depositors and maintain the safety and stabilization of the financial systems. The deposit insurance system prescribes that the financial institutions which absorb the deposits should pay some deposit insurance premiums according to some percents of the deposits to the deposit insurance corporation compulsively or voluntarily and the deposit insurance corporation should supply fund aids to the financial institutions or directly pay to the depositors fully or partially when the payment crisis arises or the financial institutions become insolvent. Because of the asymmetrical information existing among the deposit insurance corporation, the banks and the depositors, the deposit insurance system will bring two key problems that are adverse selection problem and moral hazard problem.This discourse analyzes systematically a series of questions related to asymmetric information among the deposit insurance corporation, the banks and the depositors in the research background of deposit insurance with asymmetric information. The research methods of information economics and mechanism designing are introduced into the "lacking information" deposit insurance decision-making. Meanwhile the deposit insurance mechanism under constrains of individual rationality, incentive compatibility and Pareto efficiency is designed to overcome the problems of adverse selection and moral hazard. The theory and methodology in this discourse will show their importance in guidance to establish the deposit insurance system in our country, protect the legal benefit of the depositors, maintain the safety and stability of the financial systems, assure the safety of the deposit insurance funds, deepen the innovation of financial systems, prevent and resolve the financial risk.This discourse is divided into seven chapters, the main contens of each chapter are as followes:Chapter 1 IntroductionIn this chapter, firstly the background and significance of this discourse are analyzed, afterwards the practices and research status of deposit insurance system in all countries are summed up, the deposit insurance system are compared between America and Germany, finally the main contents researched in this discourse are summarized. After the basic problems in designing deposit insurance system about the practice of each country and the situation of study and the literature concerned with deposit insurance are reviewed, the study shows that utilizing information economics and the theory and methodology of designing mechanisms to research the deposit insurance in case of imperfect information should be an important research field in future. Based on the analysis of the distinct characteristics of deposit insurance system of America and Germany in such aspects as the administration of deposit insurance, scope of coverage, funding of the deposit insurance scheme etc, the study shows that the deposit insurance system of America and Germany have following revelations about how to design our country's deposit insurance system, dealing with the problems of adverse selection and moral hazard properly, not copying other countries' model, establishing two tiered deposit insurance system.Chapter 2 Game Analysis of Bank-runs and Deposit InsuranceThis chapter undertakes the game theory to analyze the bank-runs and deposit insurance. This chapter first models the game of bank-runs without deposit insurance and then models the game of deposit insurance averting bank-runs. The study shows that, deposit insurance is a double-edged sword, on the one hand, it has the positive effect of averting bank-runs and stabilizing the banking system; on the other hand, because the depositors decrease market restriction on the bank, the bank has the incentive of risk-taking excessively, instead it is likely to increase the risk of the banking system. We must feel our way when we design the deposit insurance mechanism and handle such two decision tools as deposit insurance coverage and deposit insurance premium properly specially.Chapter 3 Adverse Selection in Deposit InsuranceThis chapter designs an optimal deposit insurance mechanism overcoming adverse selcection in the case that the information about the risk type of bank loan portfolios possed by the deposit insurance corporation at no cost is given by utilizing the theory and methodology of mechanism designing. The study shows that, we can design a sort of deposit insurance mechanism with flat-premium satisfying incentive compatible conditions in the deposit insurance market with asymmetric information, however, compared to the deposit insurance mechanism with perfect information, the bank with low-risk loan portfolios subsidizes the bank with high-risk loan portfolios.Chapter 4 Optimal Audit Mechanism in Deposit InsuranceThis chapter designs an optimal audit mechanism overcoming adverse selcection to relax the incentive constraint of the bank by utilizing the theory and methodology of mechanism designing. In the mechanism, the deposit insurance corporation pays some cost to audit the bank and examine whether the bank report its risk style of loan portfolios truthfully and punish the bank who give false information about the risk style of loan portfolios. The study shows that if the likelihood of audit exits, optimal deposit insurance mechanism should satisfy maximum punishment principle and the risk-based deposit insurance premium could be brought into effect and only the bank with low-risk loan portfolios comes under audit with stringent probability and its deposit insurance premium will not be distorted.Chapter 5 Moral Hazard in Deposit InsuranceThis chapter designs an optimal deposit insurance mechanism overcoming moral hazard in the case that the information about the effort level possed by the deposit insurance corporation at no cost is given by utilizing the theory and methodology of mechanism designing. The study shows that, we can design a sort of deposit insurance mechanism satisfying incentive compatible conditions to overcome the moral hazard in the deposit insurance market with asymmetric information, however, compared to the deposit insurance mechanism in case of perfect information, the deposit insurance coverage and deposit insurance premium decrease.Chapter 6 Optimal Monitoring Mechanism in Deposit InsuranceThis chapter designs an optimal monitoring mechanism overcoming moral hazard to enhance the incentive and surveillance to the bank by utilizing the theory and methodology of mechanism designing. In the mechanism, the deposit insurance corporation can monitor and acquire more information about the activity of the bank at some cost. The study shows that, if the likelihood of monitoring exists, the optimal monitoring mechanism should satisfy maximal punishments principle; compared to the optimal deposit insurance mechanism while the participation constrains of the bank is binding in case of symmetrical information, the deposit insurance premium doesn't change but the deposit insurance coverage decreases; compared to the optimal deposit insurance mechanism while the participation constrains of the bank is not binding and the incentive constraint of the bank is binding in case of asymmetrical information, the deposit insurance premium and deposit insurance coverage increases.Chapter 7 Conclusions and ProspectsThis chapter summarized the research conclusions of this discourse and bring forward some policy suggestions about establishing our country's deposit insurance system and point out the problems to be researched more in future.
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