Research On The Moral Hazard Under Different Deposit Insurance

It is controversial to implement the system of deposit insurance as a financial safety net. The most controversial thing about deposit insurance is the moral hazard it can induce. Moral hazard make people feel anxious about deposit insurance when China is preparing for the system of deposit insurance. We should consider the controllability of moral hazard firstly when China is preparing for it. Thus research on moral hazard and reducing moral hazard become urgent. This paper reviewed the moral hazard under America savings and loan crisis and America bank crisis to study what’s the relationship between the moral hazard under crisis and deposit insurance. Then, this paper reviewed the moral hazard of the deposit insurance system of Germany and Canada; I conclude that weather deposit insurance system could result in moral hazard not just depend on itself. At the same time, this paper studied the moral hazard under the different pay system of Japan, Turkey and Russia. I find the moral hazard that deposit result in is only a tiny fraction of the moral hazard, to a great extent, moral hazard is related to regulation, economy, politic and culture. On the basis of studying on different deposit insurance system under different nations, this paper gives the proposal for reducing moral hazard in economy, politic, regulation,culture and humanity.