The People’s Bank of China told regional heads to prepare for the start of a deposit insurance system in January, Bloomberg reported, citing Internet portal Sina.com. The original dispatch from Sina.com, which did not cite a source for the information, gave no details on how much money could be protected for individual savers. An insurance plan would mark another step in government efforts to liberalize interest rates and prepare the financial system in China to handle bank failures. The nation’s savers have piled up RMB112 trillion (US$18 trillion) of deposits, with the dominance of state-owned lenders leading many to believe in an implicit government guarantee.
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