Research On The Improvement Of Early Correction Mechanism Of Deposit Insurance In China

The deposit insurance system,prudential supervision,and the final lender system are considered the three pillars of a national financial safety net.After more than 20 years of discussion and research,China finally established an explicit deposit insurance system in 2015.In order to achieve a balance between stabilizing the financial order and preventing moral hazard,the Deposit Insurance Regulation introduced risk differential rates and gave our deposit insurance institutions the right to correct and participate in the risk disposal of insured banks early.Early correction mechanism requires regulators to identify problems and take effective actions to correct unsafe or unsound behavior of the bank before the bank's deficiencies become irreparable.It not only requires the supervisor to have a strong willingness to act,but also requires the supervisor to have superb ability to act.It requires a multi-angle risk assessment to maximize the early detection of bank risks to enhance the effectiveness of supervision and maintain a balance between maintaining the security and stability of the financial system and protecting the free activities of market entities.As an important institutional arrangement to prevent financial risks beforehand,the early correction mechanism is the key mechanism for the effective operation of the deposit insurance system.However,judging from the content of the Deposit Insurance Regulation,the early correction mechanism in the deposit insurance system is still at an imperfect stage.It has not yet formed a complete system including rules of the exercise of the power,the standard for the start of correction procedures,and the specific content of corrective measures.It has not played its due value in practice,and the early correction function of deposit insurance institution still needs to be further improved.In view of this,this article will discuss the early correction mechanism of deposit insurance and try to make a legal response to the above problems.In addition to the introduction and conclusion,this article is divided into four chapters.The first chapter is the value of early correction mechanism of deposit insurance.This chapter first clarifies the legal connotation of the early correction mechanism of deposit insurance,points out that it is a risk early warning framework constructed by early detection and timely intervention,and further grasps its rich connotation from the perspective of its comparison with risk disposal procedure.Secondly,it discusses the value of the early correction mechanism of deposit insurance,specifically reflected in curbing regulatory tolerance,preventing the moral hazard of market subjects caused by insurance claims,and preventing further expansion of financial risks,thereby protecting the interests of depositors,maintaining the security and stability of the financial system,saving social resources and costs,and finally achieving the legal value balance of financial security and financial efficiencyThe second chapter is the current functional review of the early correction mechanism of our deposit insurance.In this chapter,first of all,according to the general framework of the early correction mechanism,the relevant legal provisions of the current early correction mechanism of our deposit insurance are carefully analyzed,and its significance in the process of financial risk prevention in China,especially in the banking industry,is confirmed;the reflection of the bank's taken over cases pointed out that the early correction mechanism of our deposit insurance has not yet achieved its risk early warning goal.Secondly,it points out that the current implementation of the early correction mechanism of our deposit insurance faces practical obstacles such as the disorderly exercise of early correction power,unclear procedure start standards and single indicators,and imperfect correction measures.The third chapter is the extraterritorial legislative experience and enlightenment of the early correction mechanism.This chapter firstly recognizes that the configuration of early corrective power is closely related to the framework of a country's financial regulatory system through an examination of the main bodies that exercise early corrective power in different countries.Secondly,it examines the risk identification methods of problem banks outside the territory.As for the early detection,most countries emphasized the protection of the regulatory authority's right to obtain information and the on-site inspection rights of problem banks.Secondly,the early correction mechanism triggers and corrective measures of the United States,India,South Korea and the European Union and other countries and regions were analyzed.Three different early correction mechanism triggers and two types of corrective action systems were summarized and compared.Finally,through the analysis of the elements of the early correction mechanism of the major countries and regions,it reveals the enlightenment to improve the early correction mechanism of our deposit insurance.The fourth chapter is the suggestion to improve the early correction mechanism of our deposit insurance.Combining with the previous article,It proposes a legal approach to respond to the actual needs of the early correction mechanism of our deposit insurance.This chapter first aims at correcting the problem of disorderly exercise of the power of early correction,and advocates that the regulatory focus of China's deposit insurance institution should be clarified at the legal level.On this basis,from the perspective of regulatory objects,the responsibilities of the PBC and the CBRC are divided to form a joint supervision.Secondly,it points out it should empower the right to obtain information and the on-site inspection rights of problem banks to improve deposit insurance institution's ability to detect the risk at the early stage.Third,it is recommended to further increase capital liquidity,asset quality and other indicators on the basis of retaining the capital adequacy ratio indicator to enrich quantitative indicators and introduce the regulatory rating standards to deal with complex bank risks,so as to establish a clear and multi-level start-up standards for early correction mechanism.Finally,it clarifies the design principles of comprehensiveness,appropriateness and the combination of mandatory and discretionary measures for early correction measures of deposit insurance,and on this basis combines the existing early correction measures of CBRC to establish a rich system of early correction measures for deposit insurance.