Lack of Deposit Insurance Could Increase Risk of Chinese Systemic Banking Crisis [ANALYSIS]

An explicit  Deposit Insurance System (DIS) has been under extensive consideration by the government for more than 20 years. The factors that have delayed it appear to have subsided, and it looks  like China is ready to start a DIS. But the real question is—Does DIS helps in the event of a systemic  banking crisis? A  Deposit Insurance System (DIS)  is  a  practice  widely  adopted  by  countries  around  the  world,  and appears  consistent  with  the  Chinese  authorities’  goal  to  build  a  better-functioning financial  market  with  fair  competition  for  both  large  and  small  institutions  as  reforms increase competition. Major features expected…