Design Of Chinese Deposit Insurance System Under The Prudential Regulation

In the last several decades, the world has appeared many financial crisises. The 1970's financial crisis of Latin America and the financial crisis of Asia in 1990's were more serious. Particularly the global finance markets turbulence which is sparked by the loan crisis of American, make the person greatly terrified more. What is more, the financial crisis sparked some economies to break out a social turmoil. For controlling the social cost, all the countries are continuously creative to support financial hard various mechanism with shape, by building up a financial safe net in succession. As a kind of finance guarantee system, the deposit insurance system is thought to be one of the pillars necessarily in the modern financial system.In the process to the market economy, inner risk factor of the Chinese financial system gradually appear. the stable problem of the banking system and the benefit of depositors increasingly become the focus. These make us feel that building the explicit deposit insurance system is urgency and essential. Therefore, building up a long effect mechanism of the market offset towards the problem financial institution, is included in the point of financial dispensation reform in China" 15" program. But, being different from the past financial supervision, now it is a kind of prudent supervision and facing to a hard nut to conflict with other financial control, by respecting the independent of the bank management. We should draw lessons from foreign experience, in the frame with prudent supervision, build up the deposit insurance system which corresponds with central bank and supervisor for carrying out the monetary policy with central bank, and then make the financial institution become real market institution. This text discuss the mode of our country' deposit insurance system from the financial safe net theories and taking charge of the job.Firstly, this paper analyzes the prudent supervision, the reason why the deposit insurance system exists from the theories of the inside and weak theories of the financial institution, illuminates the requests of the prudent supervision to the deposit insurance system by the prudent supervision, the central bank and the plus or minus effect of the deposit insurance system. Secondly, we draw lessons from the nations which operate the deposit insurance system in the United States, EU and Japans, think the prudent supervision is the important respect side of the deposit insurance system design. Thirdly, it analyzes Chinese Macroeconomy financial environment, the bank's supervision structure and form ,the three pillars of the new Basel from the angle of supervisory banks in China, elaborates the necessity and coordinated effects of the deposit insurance system' supervision. Finally, it analyze the substitution and cooperativeness effect of the deposit insurance system, and then propose the factors of the Chinese deposit insurance system design under the circumstance of theprudent supervision.