The Research Of The Deposit Insurance Pricing In China

It is imperative to found deposit insurance system in our county, and the fair priced deposit insurance is an important security of a perfect deposit insurance system. From the situation of the countries and regions where the deposit insurance system has been established in, deposit insurance system has been played an active role in improving public confidence in financial institutions, curbing the risk of infection from the collapse of individual financial institutions, reducing the financial risks and protecting the interests of depositors and maintaining financial security. However, from the outbreak in 2008 of the global financial crisis, deposit insurance system can not ensure the stability of financial markets. Sub-loan has a certain link with the deposit insurance system. Then, how to make better use of the deposit insurance system has became new problems of the world's financial industry has to face to. Deposit insurance pricing is facing new challenges.In this paper, use Merton option pricing model to estimate the rate of deposit insurance. But Merton model only take into account the risk factors of bank assets. As for the capital adequacy ratio, asset quality, management, profitability and liquidity, market risk sensitivity, asset concentration and other factors are not taken into consideration. This is not consistent with the credit rating of the bank deposit rate of the requirements of insurance risk. Therefore this article chooses the data available factors and founds regression model used to amendment the Merton model. Used the supplementary capital adequacy ratio of capital standards, the credit rating as well as the CAMELS rating of concern to require banks to better assess the indicators, and selected financial indicators for commercial banks as the regulatory requirements. In theory, the estimation method is not only Merton option pricing model changes and improve, and the expected loss of use of bank assets pricing model to assess the requirements of regulation to achieve the optimum combination of the two models, making results more practical significance.This paper gives a comparative analysis of the existed two main categories of deposit insurance pricing models - Merton model and the expected loss pricing model. According to the characteristics of each model, this paper points out the strengths and weaknesses of each model in application .Then give a reasonable proposal in accordance with Chinese national conditions.