The Study On Deposit Insurance Differential Rate Determine

What had been decided at the third plenary session of the eighteenth central committee was that, speeding up the financial industry open to the inside and outside world, promoting the reform of marketability of interest rate steadily, at the same time, on the premise of strengthening the supervision, allow qualified private capital initiated the establishment of small and medium-sized banks in accordance with law, which opened the private capital to enter the monopoly industry channel to some extent, is beneficial to improve the overall efficiency of financial institutions. But it is well known that, big banks will be the first choice for many people when they deposit, especially the bank which has state-owned asset back, but small and medium-sized banks especially emerging financial institution will be have disadvantage when attract depositors with big bank. Because small and medium-sized banks offen have the accident of can not redemption in cash, there are precedents of some banks bankruptcy, people knows that there are risks when they deposit the money in small and medium-sized banks, so they select the safest way naturally. In order to reduce the operating risk of small and medium-sized banks, it shall implementation of the deposit insurance system timely; to improve the competitive power of small and medium-sized banks especially private banks, let them play more and more important role in China’s financial market.Deposit insurance system originated in USA in the30’s of last century, since the system was established, it has played an important role in protecting the interests of depositors and maintaining financial stability, which has become an effective tool in controlling and managing financial. The performance of the deposit insurance system in the financial supervision and management, financial risk prediction and warning etc, making it an important part of the financial safety net.China implement the policy of implicit state guarantee for banks, which in fact, government is responsible for banks’operating risks, it is easy to fuel moral hazard. Now, Our country has made it clear to establish deposit insurance system. In the implementation of the deposit insurance system, rate apportions making a very important link, this is an urgent problem which needs to study and solve. In this paper, we introduce the research background、purpose、significance and methods first, and then describe the relationship between bank risk and deposit insurance system; Second, introduces the status of foreign deposit insurance system as well as risk premium system of USA and India, contrasting the method of determining the risk premium between USA and India, to find out the advantages and disadvantages of each method and enlightenment to china. In the last is the core content of the paper, setting up the premium rate apportioned model, and give the rate calculation example which based on China bank.The innovation in this article is:1、When we calculate the operational risk of bank, decompose the operational risk into credit risk, liquidity risk, interest rate risk, and then calculate them, adding the result we can get the total insurance premium.2、In this article, we consider interest as the compensation of bank depositors. Because storage and carry cash privately will face the risk of being stolen and cash transaction is sometimes more trouble. So the depositors deposit cash to the bank, at the same time, use electronic bank and enjoy banking services, this means that, depositors transfer cash stolen risk to the bank. In order to make up for the bank’s risk, banks have the right to use the cash to obtain the proceeds. The problem is, business risk comes when banks use the cash, and transfer it to the depositors. To compensate the risk of depositors’, banks give depositors economic compensation, this part of the economic compensation can be understand as interest. Because the bank’s operational risk includes many kinds, how much scale does each risk occupy, we can confirm it through the impact each risk has on banks. The influence degree can be got by the scale that the losses each risk occupies to the total bank losses yearly.