The Rational Choice Of China's Deposit Insurance System

Most countries in the world have set up the deposit insurance system up to now. But China still has not built it. After China's entrance into the WTO, it's necessary for depositors and finance institutions to build deposit insurance to protect their interests and defend the safety of the finance system. Thus, either in terms of the securities of the depositors or in terms of ensuring the socia-ecnomy. We China should build a more sentifitic and reasonable deposit insurance.This article is classified into four parts of three chapters and introduction. The introduction set forth three issues: the significance to select this title; the present level of the research on the deposit insurance in domestic and foreign circles; and the analytic methods and innovations in this article. In the fist chapter, I have introduced the background of deposit insurance, the foundation of its existence, and made an objective evaluation on its function. Then I have made concrete research on America and Japan as examples in order to get some experience from them. In the second chapter, I have analyzed the negative effect of moral hazards, adverse selection and agent's cost, and how to overcome them. In the third chapter, after analyzation and research in the first two chapters, I think we should set up deposit insurance system and put forward the relative frame of it. In the end, I have set forth the concept "deposit insurance securitize" borrowing from "cat bonds securitize " and applied securitize into the deposit insurance in order to solve the liquidity and conservation of the finance crisis.