What are the functions of the deposit insurance system and the role of the deposit insurance system

1. The implementation of compulsory deposit insurance is actually a kind of compulsory protection for the development of the banking industry.

The current situation of China's financial industry is that the operating mechanism of state-owned commercial banks has not been completely changed, the asset-liability structure is irrational, and the ability to resist risks is relatively poor.

2. The establishment of a deposit insurance system is conducive to reforming traditional concepts and enhancing the public's awareness of risks.

For a long time, under the planned economic system, China's bank savings deposits are not only risk-free, but also have considerable returns, and have always been the preferred channel for people to invest.

3. The establishment of a deposit insurance system is also conducive to strengthening the supervision and control of ** banks and reducing the burden on ** banks.

The purpose of deposit insurance requires deposit insurance institutions to supervise the daily business activities of banks, regularly inspect the financial status of banks, and examine the statistical statements and accounts submitted by them.

The deposit insurance system refers to a system in which all types of depository financial institutions that meet the requirements are established in a centralized manner, and each depository institution pays insurance premiums according to a certain proportion of deposits as policyholders, establishes deposit insurance reserves, and provides financial assistance to member institutions or pays deposits directly to depositors when they have a business crisis or bankruptcy or collapse.

Deposit insurance system.

The most direct effect of this system is that it can protect the basic interests of depositors, safeguard bank credit, and stabilize financial order.

1. The deposit insurance system refers to the establishment of an insurance institution by the pooling of various types of depository financial institutions that meet the requirements, and each depository institution pays premiums to the insured as the policyholder according to a certain proportion of the deposit, and establishes a deposit insurance reserve.

When a member institution has an operational crisis or is facing bankruptcy, the deposit insurance institution can provide financial assistance to it or pay part or all of its deposits to its depositors. Therefore, the most direct effect of this system is that it can protect the basic interests of depositors, maintain bank credit, and stabilize financial order.

2. What is the role of the deposit insurance systemThe deposit insurance system was proposed in China in 2012, and the reason why the deposit insurance system was proposed was because of the financial crisis.

At that time, everyone's trust in the bank was relatively low, and they were afraid that their money would not be withdrawn after being stored in the bank, so this is also bothering a lot of banks, after all, if there is no deposit, the bank will rarely make a profit, at this time, many countries in the West have actually begun to operate the deposit insurance system, so China has also proposed a deposit insurance system. If the bank goes bankrupt, the insurance company will pay the depositor, which greatly increases the confidence of the depositor in the bank and also improves the financial industry.

of this stability.

3. When was the deposit insurance system established in China's deposit insurance system was proposed in 2012, but after it was proposed in 2012, it went through a series of **, in 13 years, the various departments of the country reached a consensus, and in 2014, the deposit insurance system began to be established, and began to prepare for the work, and in May 2015, China's deposit insurance regulations were released and officially began to be implemented.

The deposit insurance system is not only a protection of the interests of depositors, but also can pass on the economic risk of the bank, if the bank goes bankrupt, then the beneficiary will receive a compensation from the insurance company, in fact, the bank and the deposit insurance company are economic mutual partners, the insurance company needs the bank to pay insurance premiums to survive, and the bank also depends on the deposit insurance company to maintain stability.

Deposit insurance system.

Its role is conducive to better protecting the rights and interests of depositors, improving the soundness of China's financial system, and promoting the reform and development of small and medium-sized banks.

1. It is conducive to better protecting the rights and interests of depositors.

The deposit insurance system can strengthen and improve the protection of depositors and safeguard the financial market.

and public confidence in our banking system.

1) Through the formulation and promulgation of the Regulations on Deposit Insurance, a clear institutional guarantee for the public's deposit security will be provided in the form of legislation.

2) Strengthen market restraint on financial institutions, and urge financial institutions to operate prudently and prudently, so as to better protect the safety of depositors' deposits.

Second, it is conducive to improving the soundness of China's financial system.

Generally speaking, a well-established financial safety net is provided by ** banks.

It consists of three parts: lender of last resort function, prudential supervision and deposit insurance system. The establishment of the deposit insurance system is to improve and strengthen the existing financial safety net, by strengthening the deposit insurance and the central bank.

The coordination and cooperation of financial stability, macro-prudential management, and financial supervision have jointly improved the efficiency of China's financial safety net. Through the implementation of risk-based differential rates, banks are encouraged to operate prudently and prudently. Even if there are problems in the operation of individual banks, deposit insurance, as a market-oriented disposal platform, can flexibly use market-oriented methods such as acquisition and undertaking to carry out rapid and efficient disposal, so as to fully protect depositors and reduce disposal costs as much as possible, while maintaining uninterrupted financial services and maintaining the soundness of the banking system.

3. It is conducive to the reform and development of small and medium-sized banks.

The establishment of a deposit insurance system is conducive to strengthening market discipline and restraint, providing a solid institutional guarantee for the healthy development of the banking industry, especially small and medium-sized banks, and speeding up the development of private banks and small and medium-sized banks, and increasing the number of small and micro enterprises.

of financial support.

1) The deposit insurance system can enhance the credit and competitiveness of small and medium-sized banks, create a level playing field for large, medium and small banks, and promote equal competition and balanced development of all types of banking financial institutions.

2) By strengthening the protection of depositors and stabilizing market expectations, the deposit insurance system can create a market environment for small and medium-sized banks to operate in a sound manner, so that small banks can have an institutional basis for equal competition with large banks.

3) After the establishment of the deposit insurance system, by imposing differential rates on financial institutions with different operating qualities and taking timely corrective measures, it is conducive to further promoting the prudent operation and healthy development of small and medium-sized banks and private banks, gradually forming a more rational financial structure and layout, and promoting the formation of an effective competition and sustainable development.

The system of small financial institutions enriches the financial services and supply at the grassroots level.

1. Protect the interests of depositors and enhance the public's confidence in the banking system.

If a deposit insurance system is established, when the bank implementing the system fails to turn over funds or goes bankrupt and is unable to pay the depositor's deposit, in accordance with the terms of the insurance contract, the insured bank can obtain compensation or financial assistance from the deposit insurance institution, or be accepted or merged, the depositor's deposit loss will be reduced to the smallest possible degree of credit slag, and the depositor's interests will be effectively protected with repentance. Although the deposit insurance system is an after-the-fact remedy, its effect is also reflected in the ex-ante, when the public knows that the bank has implemented the system, even if the bank does have problems, they will be compensated accordingly, which gives them a psychological sense of security, which can effectively reduce the highly contagious sense of panic and further reduce the run on the banking system.

Second, it can effectively improve the stability of the financial system and maintain normal financial order.

Since the deposit insurance institution bears the responsibility of guaranteeing payment to the banks in question, it will inevitably supervise and manage the daily business activities of the insured banks to a certain extent, discover hidden dangers from them, and make timely suggestions and warnings to ensure that all banks will operate soundly, which actually adds a financial safety net. At the same time, because of the positive effect of this system on public psychology, it can also effectively prevent the occurrence and spread of bank runs, thereby promoting the stability of the financial system.

3. Promote the banking industry to appropriately focus on fair competition and provide the public with high-quality and low-cost services.

Because of their size and strength, large banks are often in an advantageous position in absorbing deposits, while small and medium-sized banks are in a disadvantageous position, and this is prone to a situation in which large banks operate in a monopoly. Monopoly is not conducive to the interests of consumers, and the benefits obtained by the public will be smaller than those under perfect competition. The deposit insurance system is one of the effective ways to protect small and medium-sized banks and promote fair competition.

It allows depositors to form a consensus that the system protects deposits to the same extent regardless of whether they are deposited in large or small banks, so the quality of the services provided will be the main factor for customers to choose depository banks.

Fourth, the deposit insurance institution can provide guarantees, subsidies or financing support to the troubled banks to save them, or promote them to be merged by stronger banks, so as to reduce social stability and contribute to social stability.

Further information] The advantages of the explicit deposit insurance system are:

1. Clarify the amount of compensation paid by depositors in the event of bank failure to stabilize depositors' confidence;

2. Establish a professional organization to quickly and effectively dispose of problematic banks in a clear manner and save disposal costs;

3. Carry out ** accumulation in advance to be used to compensate depositors and dispose of banks;

Fourth, strengthen the market constraints of the banking system and clarify the responsibilities of all parties in the event of bank failure.

When a bank implementing this system fails to pay depositors' deposits due to ineffective capital turnover or goes bankrupt and fails, the insured bank can obtain compensation or financial assistance from the deposit insurance institution in accordance with the terms of the insurance contract, or be accepted or merged, and the depositors' deposit losses will be reduced to the smallest possible extent, thus effectively protecting the interests of depositors, especially the majority of small and medium-sized depositors. When the public knows that the bank has implemented the system, even if the bank really has problems, it will be compensated accordingly, which gives them a sense of security psychologically, which can effectively reduce the contagious sense of panic, thereby reducing the run on the banking system, effectively improving the stability of the financial system and maintaining normal financial order.

In the design of China's deposit insurance system, great importance is attached to the protection of deposits: first, the deposit insurance limit is relatively high, and the vast majority of deposits are protected through some special designs, and the amount will be gradually adjusted with the economic development situation. Second, because China as a whole is in a stage of rapid economic development, the possibility of financial institutions failing is relatively small, and the failure of financial institutions is mainly realized by means of merger and transfer, which will not affect the interests of depositors.

Further information: In the modern financial system, financial institutions such as banks that can absorb deposits play a very important role. Unlike ordinary enterprises, financial institutions have the characteristics of high debt, and most of the funds they operate come from deposits from the public.

Legal basis: Article 1 of the Regulations on Deposit Insurance is formulated in order to establish and standardize the deposit insurance system, protect the legitimate rights and interests of depositors in accordance with the law, prevent and resolve financial risks in a timely manner, and maintain financial stability.

Commercial banks, rural cooperative banks, rural credit cooperatives, and other banking financial institutions (hereinafter collectively referred to as insurance institutions) established within the territory of the People's Republic of China that absorb deposits shall take out deposit insurance in accordance with the provisions of these Regulations.

The deposit insurance system is a financial security system.

The deposit insurance system refers to a system in which all kinds of depository financial institutions that meet the requirements are pooled together to establish an insurance institution, and each depository institution pays insurance premiums to it as an insured person according to a certain proportion of deposits, establishes a deposit insurance reserve, and provides financial assistance to the member institutions or directly pays part or all of the deposits to the depositors when the member institutions have a business crisis or face bankruptcy and bankruptcy, so as to protect the interests of depositors, maintain bank credit and stabilize the financial order.

Advantages: Gives depositors confidence assurance against bank runs and contagion of financial risks.

The advantage of deposit insurance is that it can give depositors confidence assurance, reduce information asymmetry, and play a significant role in preventing bank runs and financial risk contagion.

Disadvantages: Adverse selection and moral hazard may arise.

Deposit insurance regimes also have the potential to generate adverse selection and moral hazard.

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