Research On Deposit Insurance Pricing Of Chinese Commercial Banks

Since the reform and opening up,the status of finance in the modern economy has gradually improved.To this end,China has continuously promoted the reform of the financial system to gradually develop and improve our financial system,guard against financial risks,and maintain the stability of the financial market.As the center of the financial system,commercial banks have high risks and uncertainties that will have a far-reaching impact on the entire financial system and easily lead to financial crises.As the foundation of credit and the core business of commercial banks,deposits are the main liabilities of commercial banks in China,and their stability and security have a major impact on the stability of the financial system.Due to the influence of concepts and traditional culture,Chinese residents generally have a higher willingness to save.In the process of asset allocation,bank deposits are a relatively large choice.At present,the savings rate of our residents has exceeded 40%,and our residents ’general ability to resist risks is relatively low,so how to provide a solid guarantee for residents’ deposits have become an urgent topic.The deposit insurance system that emerged,as a result,provides an understanding of the problem.In order to protect the interests of depositors,improving the stability of the banking system,maintain the continuous operation of the financial system,and promote the sustainable and healthy development of China’s economy,China officially established a commercial bank deposit insurance system in 2015 and introduced relevant regulations to deal with deposit insurance-related issues.It clarifies,including the deposit insurance pricing mechanism,that is,the benchmark rate determined by the macroeconomy and the operation of the deposit insurance fund in China and the differential rate of risk determined by the profitability,risk level and capital quality of the insurer pose.From the general experience of the international community,deposit insurance institutions generally undertake many functions.When a bank has a problem,the deposit insurance institution will provide financial assistance to it.If the bank’s business conditions continue to deteriorate to the point of bankruptcy and liquidation,the deposit insurance institution will compensate the depositors who deposit in this bank.Generally speaking,the enterprise will enter the bankruptcy liquidation process when it becomes insolvent.However,when this happens to the commercial bank,the bankruptcy liquidation will not be carried out immediately,only when the asset value of the commercial bank continues to drop to a certain level At this time,the supervisory agency will conduct bankruptcy liquidation on the bank,and the deposit insurance agency will pay the depositor ’s deposit in the liquidated bank.This is the principle of the regulatory tolerance system.This article starts from the micro perspective of the insured bank.Based on previous research,it combines the option pricing model and the expected loss pricing model,introduces the important institutional element of regulatory tolerance,deduces the pricing model of the deposit insurance premium rate,and sets the pricing influential parameters in the model are theoretically estimated.Based on the derivation of the theoretical model,the relevant data of 13 listed companies in China are obtained,and the deposit insurance rates for 2014-2018 are calculated in the obtained pricing formula,and the measured rates are analyzed from multiple angles.This article takes the case of the Baoshang Bank being taken over as an example,analyzes the financial data of the Baoshang Bank over years,summarizes the main causes and significant characteristics of its risks,and judges the important influencing factors for the deposit insurance rate based on this.The derivation of the deposit insurance pricing rate is based on the multiple linear regression of the panel data to obtain its impact on the deposit insurance rate,and through the sensitivity analysis to intuitively show this impact process,more intuitive evaluation of the main parameters of the deposit as for the impact of insurance rates,draw corresponding conclusions and make appropriate policy recommendations accordingly.