Study On Designing China's Deposit Insurance Operating Model

As an important part of the "Financial Security Net", Deposit Insurance System (DIS) has operated for more than 70 years in the world and has played an important role on guarding against financial risks in some degree. With China's development of market economy and deepened reform of financial regime, to establish an efficient withdrawal mechanism in financial market composes a focal point attracting the attention of the whole society, and unprecedented emphasis is placed on DIS. Especially after State Council agreed to set up DIS in principle at the beginning of 2005, research on the system becomes one of the hot topics in financial theory field.This paper comprehensively discusses and analyzes China's DIS operating model in six aspects. Also, on the basis of foreign experience, the paper aims at working out a right way for building up a DIS where both motivation and competition coexist. The outline of this paper is organized as follows:Chapter One provides research objective and briefly introduces the concepts, features and history of DIS; it also summarizes research framework and new findings in the study.Afterward, Chapter Two provides the literature review.Then, Chapter Three sums up development trend of DIS and workable suggestions proposed by International Monetary Fund (IMF) after comparing practice and implication of DIS in some typical countries (regions). Chapter Four analyzes the necessity and feasibility of setting up DIS in China.Next, in Chapter Five, an initial proposition of DIS operating model is stated, which includes target establishment, institution construction, fund foundation, insurance scope definition and insurance fee stipulation.It is suggested that the system be built up in a practical and gradual way.Chapter Six tries to explore issues of environment optimization so as to make DIS function efficiently.It refers to improvement and deepening in four areas:government support policy, supervision over banks, corporate governance in banking industry and society awareness of financial risks.Lastly, Chapter Seven summarizes the research conclusions and points out the problems to be further researched in the future.