The government in Taiwan took elaborate measures of regulation and protection of local financial institutions before the 1980's to maintain stable growth of the financial industry. Therefore, the operations of financial institutions had been steady and smooth at that period of time. When local and international financial environments started to experience rapid changes brought about partly by the trend of liberalization and globalization, the government responded by sequential liberalization of the financial businesses and relaxation of relevant financial regulations. As a result, the industry itself was empowered with higher operations freedom, though accompanied by increasing competition and higher business risk. In consideration of the far-reaching impact of business failure of financial institutions on wide facets of the economy, the government undertook to devise a deposit insurance system to safeguard the benefits of small depositors on the basis of Article 46 of the Banking Law. The intention was widely supported by the financial industry, academia and experts. In 1983 Ministry of Finance joined by the Central Bank invited representatives from the financial industry and drafted the Deposit Insurance Act. After the approval by the Parliament, the law was promulgated and implemented by Presidential decree on January 9, 1985, which has become the origin of Taiwan's deposit insurance law. Stockholder's right management of the CDIC was transferred from the Ministry of Finance to the Financial Supervisory Commission (FSC) in 2013. After shares of all original domestic commercial banks (less than 0.01% shares of CDIC) were transferred to the FSC in 2014, the FSC and the Central Bank are the only two shareholders of the CDIC now.
In the beginning of 1985, several panic run incidents broke out, including Tenth Credit Cooperative Association of Taipei City, Cathay Trust and Investment Corporation, Asia Trust and Investment Corporation and Overseas Chinese Trust & Investment Corporation. These crises highlighted the urgency of putting a deposit insurance system in place. As a result, Ministry of Finance in conjunction with the Central Bank organized and funded the establishment of Central Deposit Insurance Corporation (CDIC) based on the promulgation of the Deposit Insurance Act. CDIC officially opened business on September 27, 1985, and became specialized institution of deposit insurance.