Study On The Deposit Insurance Legal System

This paper focuses on issues related to the deposit insurance law. It covers a totalof eight chapters.The first chapter discusses some issues on introduction, which includes fiveaspects, namely, the background and significance of this, the definitions of relatedconcepts, methods and thinking patterns, contents and structural arrangements. Thepart defining the relevant concepts mainly discusses the definitions of deposit anddeposit insurance, which share a fundamental discourse sense in the whole paper.Meanwhile, possible innovations are also discussed to sublime the last part of thispaper.The second chapter is about literature reviews. Through an analysis of researcheson current deposit insurance system both at home and abroad, it lays a foundation forfurther studies. The study on the domestic deposit insurance system includes sevenparts: the necessity and feasibility and the value analysis, environment and conditionsfor introduction, negative effects especially moral hazard and adverse choices,positioning functions of regulatory agency and its organizational models, insurancepricing, collection and compensation, learning from the experience and historicalstudies of foreign countries and other related fields. Then it makes an introduction andevaluation of the design and building of the domestic insurance system.The third chapter brings the ontological contents of deposit insurance law system,which are discussed from the following four aspects: basic concepts and contents ofdeposit insurance law system, theoretical basis of economics on deposit insurance,legal attribute analysis of deposit insurance, basic theories of deposit insurance lawsystem. The first section discusses the basic concepts and contents of depositinsurance law system. Starting from the studies on basic theory of deposit insurancelaw system of foreign countries and regions, it analyses their common features interms of basic theory. This section also refers to the main contents of depositinsurance law system among major countries and regions abroad, which are supposedto learn from. The second section mainly includes the functions and deficiencies aswell as the alternative measures of deposit insurance law system. It argues that thedeposit insurance law system can get partial functions and avoid deficiencies to some extent through lender of last resort, prudent banking supervision and inter-bank aid ofCentral Bank. The third section mainly explains that deposit insurance is the basicissues of policy insurance, liability insurance and guarantee insurance. The forthsection is mainly about subject, object and contents of deposit insurance law relations.And its contents are explored from the following angles: rights and obligations of theinsurer, rights and obligations of the insured, rights and obligations of the third personof interest, the regulatory responsibilities of government authorities and insurancepremium calculation.The fourth chapter analyzes the deposit insurance law system, which boils downto positive and negative functions of deposit insurance law system and causes andcountermeasures of financial risk. In the section of positive function, the depositinsurance law system is analyzed from following aspects: protecting the interest ofdepositors, maintaining the security and stability of financial system, improvingbank-withdrawal mechanism and increasing the efficiency of the market economy. Inthe section of negative functions, there are moral hazard, adverse choices and otherdisadvantages likely to increasing cost. In regard to moral hazard, it is analyzed fromethical risk of deposit insurance institutions, regulatory agencies, insured nonmemberbanks and the depositors, respectively. The final section explores the causes of depositrisk, market regulation and malfunction of administrative supervision, and thelegitimacy of insurance against financial risk.The fifth chapter is a comparative study of deposit insurance law system. Itmainly focuses on the deposit insurance law systems of the United States, theEuropean Union and Taiwan. In the first section, the American deposit insurance lawsystem is illustrated from its establishment, development and main content. In thesecond section, the deposit insurance law systems of European countries, includingthe United Kingdom, Germany and France, are summarized and evaluated. And theirlatest tendency is also analyzed in this part. In the third section, the deposit insurancelaw system of Taiwan is studied from its establishment, reform and main contents.The last section contains the experiences and enlightments of all countries and regions,which can put into words as: First, formal institutional arrangement provides cleardirection; second, a deposit insurance law system suitable for a country’s or region’sfinancial system is the best; third, the deposit insurance law system is not a universaltool; Finally, a static and mono-oriented management system is sure to be replaced bya dynamic and flexible one. The sixth chapter analyzes the necessity and feasibility of establishing a depositinsurance law system in china. Here are the reasons for the necessity: protecting theinterests of small and medium depositors; intensifying China’s financial regulatorysystem; strengthening the ability to handle financial risk; improving the withdrawalmechanism in China’s financial institution market; the drawbacks in current implicitdeposit guarantee system; the need of the interest rates liberalization process; gearingto the international financial community. And the reasons for the feasibility: themarket conditions, legal environment, public opinion environment and technologicalsupport can create conditions for its establishment. Significant progress made in thereform of the banking industry and the banking industry’s wider opening to theoutside world have prepared China’s establishment of deposit insurance system withnecessary market conditions; necessary legal system serving as support for newpattern of financial supervision becomes increasingly mature for its development; themarket economy has gradually won supports among people and the increasinginsurance awareness has built a necessary environment of public opinion. What’smore, the establishment of deposit insurance system has also equipped withtechnological support, such as certificate-based deposit system for screening accountcalculation, fast payment network system for strengthening management.The seventh chapter gives several views of building a deposit insurance legalsystem in China, including systems design concepts, functions of deposit insuranceinstitutions, modes of organization and institutional settings of deposit insurancesystem, operation management and supervision of deposit insurance institutions,rights and interest of the insured under the deposit insurance system and the buildingof the deposit insurance supporting system. In regard to systems design concepts, it isanalyzed from the purposes and basic principles of legislation. Functions of depositinsurance institutions are illustrated from basic functions and business scope.Operation management concerns insurance approach and qualification, depositinsurance scope and deposit limits, and premium collection and fund operation.Analysis on supervision of deposit insurance institutions starts with regulation andpenalty power, horizontal cooperation of deposit insurance institutions with otheragencies. Rights and interest of the insured under the deposit insurance system areneglected in recent researches, which should be paid much attention to. Besides, thebuilding of the deposit insurance supporting system is discussed on the basis ofrelevant systems from abroad. The eighth chapter is about the time of introduction and roadmap of depositinsurance system. It mainly focuses on the best opportunity and transitional issues ofadopting deposit insurance system. A roadmap to adopt deposit insurance system ismade out for further studies.