The Financial Stability Forum (FSF) of the Bank of International Settlement (BIS) published in September 2001 the "Guidance for Developing Effective Deposit Insurance Systems". The content of such Guidance follows the methods and philosophy adopted by the Federal Deposit Insurance Corporation (FDIC) of the US. The deposit insurance was originated from the US deposit insurance mechanism which was adopted by the US Government in 1930's to stabilize and adjust the chaos of financial system at that time. Until now, the FDIC is considered the mechanism of deposit insurance which has the longest history of operation. It has managed many bankruptcies and prevented the world from being plagued by the global financial crisis and panic. The function served by deposit insurance mechanism has won universal recognition after it has been through lots of crises and adjustments. Such mechanism, as it is still working properly, has become the best model to e followed by legislatures of various countries and the focus of academic research in this field. Given the fact that Taiwan's financial system and financial monitoring regime has closely followed in footsteps of the experiences of the US and other advanced countries, our deposit insurance mechanism should also comply with the rules adopted by international organizations and the foregoing International Guidance. While Taiwan is currently engaged in the adjustment of financial safety net, it is necessary to learn from the experiences of the implementation of deposit insurance in foreign countries. By doing this, we can facilitate the combination of financial monitoring with the function of deposit insurance, so that the problems of failed banks can be effectively managed.