The Loss Compensation Of The Commercial Banks And The Deposit Insurance System

In recent years, financial crisis takes place frequently, and the bankruptcy of the banks often appears. This makes the safety of the finance industry the focus of all countries. As one of the three factors of the finance safety net, the deposit insurance system is widely acknowledged as a basic system to establish the finance stability mechanism. Since 1993, when the first deposit insurance company-the U.S. Federal Deposit Insurance Corporation (FDIC) set up, the deposit insurance system has experienced many financial crisis and it has been proved to be an effective solution to deal with the crisis.With the establishment of the market economy system in our country, the completion of the joint-stock reform of the state-owned commercial banks, and the general openness of our financial market, the competition our bank industry faces is extraordinarily fierce. The innovation of the financial products and the development of the derivative financial instruments increase the risk they should confront with. Thus, we need to build up the clear deposit insurance system in our country in order to construct a strict finance safety net and maintain the stability of the financial system.This thesis begins with the compensation of the commercial banks'losses, explains the important roles that the deposit insurance system plays in compensating the losses of the commercial banks, proves the deficiency of the deposit insurance system that exists in our country, and focuses on building up a deposit insurance system of Chinese character and puts forward that under the deposit insurance system, commercial banks should set a reasonable insurance coefficient to compensates the catastrophe loss, reduce its costs, keep the liquidity of the capital and insure its normal operation as well, under the condition of a deduction of the reserves which is to compensate the expected loss and the economic capital which is to compensate the unexpected loss.