Study Of The Commercial Bank Deposit Insurance Loss Ratio

The deposit insurance system is a system arrangement of a country in order to protect the interests of deposit-taking financial institution depositors and maintain the security and stability of the financial system. Under the interest rate marketization background, protecting the interests of depositors in the bank as the main body of China’s financial system is particularly important. Our deposit insurance system formally implemented in May 1, 2015.Our country is in deposit insurance primary stage.This dissertation firstly introduces the concept of the deposit insurance system such as the detailed operation of the process, its basic characteristics. And discuss the importance of setting up a deposit insurance systemdeposits from the banking fragility, bank runs effect,protection depositors and to the importance of other financial safety net. This dissertation describes the purpose and meaning deposit of established insurance system from protecting the interests of depositors, improving macroeconomic regulation to strengthen financial supervision, improving commercial bank reform, and creating a fair competitive environment,realizating market interest rate under the interest rate market background. And illustrating the options of the deposit insurance, and the study base on it.This dissertation uses Ronn and Verma model to estimate the deposit insurance premiums of 16 listed commercial banks in China. Then estimate the deposit insurance premiums via B-S model Under the different loss ratios so that find a proper insurance premiums to have a control study, and find the proper loss ratios. Next use the methods given by < Commercial bank regulation rating internal guidance > to Measure the regulation scores with which to verify feasibility of loss ratios and illuminate the advantages of the difference between the proportion.China’s "Deposit Insurance Regulations" : China’s implementation of quota compensation, the maximum payment is 500,000 yuan. The People’s Bank of China jointly with relevant departments of the State Council can adjust the maximum reimbursement limit according to economic development, structural changes in deposits, financial conditions and other risk factors, and execute afer the State Council’s approval. However, This dissertation illustrates the shortcomings of the implementation of quota and compensation for moral hazard exists from the perspective of the depositor and the bank angle, and it does notconducive to the stability of financial markets. Then illustrates the benefits of differential rate compensating in varying proportions from the aspects of deposit insurance agencies, banks and depositors behavior. In a conclusion, our country should implement the deposit insurance system which compensating in varying proportions under the differential rates and we propose the subsequent research opinion.China has promulgated to implement the quota compensation for a year. But the design study on the deposit insurance payment rates will not stop. This system starting from the implementation date has only just for one year, does not appear any case of bank failures.So our country’s deposit insurance system may cause the opposite effect, and if it can play a reasonable and effective role when bank failures has not been confirmed. Study on the deposit insurance system to improve and perfect will continue.