Study On Chinese Deposit Insurance System

The paper conducted a theoretical analysis of the deposit insurance system, conducted the in-depth and detailed empirical analysis of the operational performance of the deposit insurance system, and summarized the development trend of foreign deposit insurance system. By the external environment analysis of the establishment of the deposit insurance system in China, clearly establishing a deposit insurance system in China is of great significance, and there are many favorable conditions, but there are still some difficulties to overcome. Centering on how to establish a deposit insurance system in China this purpose, the paper designed and verified the framework of the deposit insurance system in China, and how to optimize the operational measures of the deposit insurance system.The paper viewed, the establishment of a deposit insurance system is vital of the development of national financial stability, and achieved remarkable results. Although there are reverse selection, moral hazard and representation in the deposit insurance system itself, with the continued development and improvement of its own, its functions will be more effectively play. After 20 years of reform and opening up in China, There was the larger development in the financial sector, but at the same time huge risks have been accumulated in the development process of China's financial institutions, and they are always threatening the security and stability of China's financial system. Therefore, in order to ensure financial industry to be further healthy and stably develop, the deposit insurance system must be established in China. Although the development of China's financial industry has created favorable conditions to establish the deposit insurance system, but the Chinese really have to face many constraints, such as state-owned banks with a lot of bad assets, the lower bank's capital adequacy ratio, the incomplete financial legislation and financial regulations, and so on. Although deposit insurance system provided a good market withdrawal mechanism for the operation of financial institutions, but it did not provide relevant departments and effective supervision of banking activities. In order to discover problems in bank management and operation, the supervision remains critical. Like other countries, the objectives to establish China's deposit insurance system are: to protect the interests of depositors and to safeguard the stability of the banking sector; to regulate commercial banks as CBRC effective complement and strengthen CBRC regulatory capacity; to create an effective market withdrawal mechanism for banks in order to avoid bank bankruptcy. China should adopt mandatory type, level of the deposit insurance system rates, the government and banking sources, co-funded by the protection of all deposits except placements type. Because there is no perfect timing when to establish deposit insurance system in China, it is necessary to speed up the relevant supporting system building in order to make it effectively operate.