Deposit insurance plan moving forward

The People's Bank of China, the nation's central bank, has signed a memorandum of understanding with the US Federal Deposit Insurance Corp, a move that market players have taken as a new step toward launching deposit insurance in China.

The MOU includes matters of technical assistance, exchange of information and the coordination of policy, and covered areas of financial services, depositor protection and global financial stability policies, the PBOC said on its website.

The deposit insurance system became a hot-button issue in June, when lenders were hit by a liquidity crunch, and interbank rates were pushed up.