Study On Dominant Implementation Of The Deposit Insurance System In China

Looking backward the history of banking, we can see the bankruptcy is coupled with its development. It is much obvious after the 20th century. The damage caused by the giant scale of bankruptcy of financial institution is immeasurable. In order to manage the risk, financial administrative keep on innovating and developing the safety net mechanism to maintain the stability of the finance environment. As a preeminent part of the safety net, the explicit deposit insurance (EDI) which aims at protecting the below-middle depositors'interests plays a positive role in the maintaining process. In a long time, China is adopting the implicit Deposit Insurance System(DIS) arrangement in the past, which divide the cost and the revenue of funding apart, leading to the ignorance of risk control for the bank. As the revolutionary changes happened in the banking industry, it is necessary and urgent to build up the explicit deposit insurance system. From the perspective of the international experiences, we can easily conclude that it exits a lot commons among the operation of DIS. At the meantime, there are some differences because of the unique environment of the country. However, every coin has two sides, if the DIS is not properly designed, it could cause even more harm. Hence, it is necessary to build up a deposit insurance system which fit our own macro environment and micro situation.The paper is divided into six chapters. Chapter One is a brief introduction of the background, the meaning and the current researches about deposit insurance; Chapter Two reviews the rhetorical bases and the classical D-D Model of EDI; Chapter Three introduced the international guide of EDI briefly, and compared three model of deposit insurance namely American model, Japanese model and German model to conclude the aspects that we can learn from. Chapter Four discusses the necessity of constructing a deposit system in China, and analyses the macro and micro situation as a part bases for the following studies. Chapter Five, which is the most important part of the paper, continue to analyses the suitable framework for China from six perspectives. Chapter Six demonstrate the potential effects of implement the deposit. The last Chapter is the conclusion.The paper aims to conduct a systematical research and analyses to the framework of DIS which suit to the realistic situation of China, and to resolve the potential controversies during the process of implementing, providing the suggestion which based on both theory and practice.