China to introduce deposit insurance scheme

A plan to insure about 98% of bank deposits in China has been submitted for State Council approval and is expected to be introduced next year, the South China Morning Post reported. The scheme would require financial institutions to buy deposit insurance from the Central Deposit Insurance Corp, which would have the right to borrow from the central bank and Ministry of Finance. The plan will be financed by participating banks. In the event of an insured institution failing, the insurance corporation would compensate depositors. China had US$6.7 trillion in yuan-denominated deposits at the end of October.