Research On Early Correction System Of Deposit Insurance

As an institutional choice for maintaining financial stability and protecting the interests of depositors in the development of modern finance,the deposit insurance system has been recognized by more and more countries and regions.Although the system has achieved remarkable results in preventing runs and improving public confidence in the banking system,it has also caused moral hazard,adverse selection and the decline in the effectiveness of financial supervision to a certain extent.The theoretical research and legislative practice of the early correction system in various countries have proved that the system not only helps to significantly alleviate the negative impact of deposit insurance,but also because of its forward-looking ability to prevent systemic financial risks,it can also avoid the escalation and spread of financial risks,thereby reducing the cost of risk disposal and promoting the stable development of the financial industry.The promulgation of the Deposit Insurance Regulations in 2015 marked the formal establishment of an explicit deposit insurance system in China.In order to effectively maintain the stability and security of the financial industry,the Deposit Insurance Regulations give deposit insurance institutions the functions of early correction and risk disposal,but there are also many deficiencies that need to be regulated,and are highlighted in two aspects: first,the legal status of deposit insurance institutions is not clearly defined,resulting in unclear content and unscientific allocation of early correction powers,and second,the provisions on the standards for the initiation of early corrective measures are very vague,and the relevant measurement indicators are too single.This principled system design is obviously not conducive to the full realization of the responsibilities and objectives of deposit insurance institutions,and ultimately erodes the legislative purpose of effectively controlling financial risks and maintaining financial security.As an important part of the deposit insurance system,early correction is undoubtedly related to the overall situation of financial security and stability.To this end,China’s early correction system should focus on innovating and improving from the following aspects:First,the independent regulatory status of deposit insurance institutions should be clearly stipulated from the legislative level,and they should be given the power to take various early corrective measures to enrich the "toolbox" of early correction;second,based on China’s current financial environment and absorb and learn from extraterritorial regulatory practices,build a standard system for the early corrective measures that take into account the scientificity,effectiveness and feasibility,and take the capital adequacy ratio as the core "safe and stable" standard.With reference to the results of the risk rating of deposit insurance,more stringent criteria for the initiation of early corrective measures are adopted for systemically important insurance institutions;finally,the relevant supporting mechanisms are actively improved to maximize the regulatory effect according to cohesion,such as major risk monitoring and early warning mechanisms,information systems and information sharing mechanisms,early correction procedures and risk disposal procedures linkage mechanisms,and financial institution exit mechanisms.