The Research Of Deposit Insurance System

Deposit Insurance System (DIS) has been adopted many countries in the world since its first establishment in USA in 1930' s. In recent years, with the establishment of market-oriented economy, the promotion of finance reform and the growth of competition system in China, some financial institutions run into poor management and become bankrupt. It is important for China to absorb the advantages and lessons in constructing China' s DIS, which will also be beneficial to deepen China' s financial reform, prevent and mitigate system financial risks and maintaining economic development.Using both quantitative and qualitative analysis methods, this paper studies the operating principle of deposit insurance systems from different countries. Based on the present China financial situation, the paper analyses the problems arising from China financial system and the necessity and feasibility of establish the DIS. Through the comparison insurance deposit systems of developed countries, borrowing the successful experience of India and Russia, the paper also puts forward the suggestion of China' s establishment of the DIS. Based on the comparison of international experience for DIS, the paper suggests that the institution of DIS should not have the function of banking supervision in the initial stage. Small and medium sized banks should set up deposit insurance in advance, and it should be linked to market entry, capital adequacy supervision.To establish DIS in China, we must combine international experience with our national conditions. According to finance reform in China, Deposit Insurance System should be give a clear location, and carried out gradually.