China Launches Their Own FDIC

By lunaradmin - Mar 31, 2015      
Chinese Banks

Taking a page out of the U.S. textbook, the Chinese government announced today that they will be launching an insurance program, similar to the United States’ Federal Deposit Rate Insurance Corporation (FDIC), on May 1st that will safeguard bank deposits of up to 500,000 yuan, which equates to just over $80,000.

According to Chinese central bank officials, it is projected that the insurance program will be able to cover more than 99% of the total deposits. China is currently ranked as one of the largest depositors with more than $19 trillion in bank deposits.

Even with the program launching at such a close timeframe, there are still some major concerns on some officials’ minds. One of the main issues remains that there is still no safeguard in place for the deposits that are not backed by the new program. It is estimated that the remaining un-insured deposits represent nearly half of the total value of all Chinese bank deposits.

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