Study of deposit insurance pricing model for listed banks in China based on RV method

As Chinese financial reform is deepening, the construction of the deposit insurance system has been one of major theoretical and practical issues on the financial system reform in China. This paper adopts Ronn & Verma pricing model, and calculates the tolerance parameter of listed banks in China, which is 0.95, then constructs the deposit insurance pricing model for Chinese listed banks. The insurance rates of five Chinese listed banks are calculated in the pricing model by collecting their financial information. The result shows a greater gap between the rate of each banks and the average rate, which supports that China is appropriate to adopt the different risk-based rates system of insurance pricing rather than the single rate system.