Legal And Economic Analysis Of Internet Financial Supervision

Internet finance has become an important part of people’s consumption and investment.The essence of Internet finance is still finance,and the financial industry itself is characterized by externality,financial fragility,information asymmetry,etc.Therefore,moderate intervention by the government is needed to make up for market failure in financial operation,ensure the stability of financial system operation,and then reduce the possibility of financial risk outbreak.At present,there are a lot of articles on Internet financial regulation,involving various disciplines such as law,economics,finance and so on.From the perspective of law,the existing literature mainly focuses on various risks of Internet finance,such as credit risk,illegal fund-raising risk,introduction of foreign regulatory system,problems existing in domestic regulatory system and improvement countermeasures.From the perspective of economics and finance,the existing literature mainly focuses on the impact and challenge of Internet finance on traditional finance,and the impact of Internet finance on a certain sector of real economy.Generally speaking,the existing literature mostly focuses on the research of a specific field of Internet finance,but lacks systematic and in-depth research on the regulatory system of Internet finance,theoretical basis,basic content and efficiency evaluation of system operation.The author tries to from the Angle of law and economics,systematic research on system of Internet financial regulation,evaluating the regulation of financial innovation or said economic efficiency and economic fairness,financial security and how much influence,should be made to the financial regulatory system in the Internet how to modification and design,to give attention to both equity and efficiency,on the premise of ensuring financial security and not depressed financial innovation.The research of this paper has both theoretical and practical significance.The theoretical significance of this paper is as follows: 1.From the perspective of the research object,this paper selects the Internet finance,which is very popular in recent years,as the background to conduct a systematic study on the Internet finance regulation,in an attempt to better understand the role and status of the government in the market operation and economy.Moderate government intervention is a necessary institutional guarantee for the healthy and effective operation of the financial system,and also an effective institutional guarantee for the healthy development of Internet finance.Chinese economists believe that too much government intervention is the main obstacle to financial development,so there is a situation of "one regulation is dead",but after the deregulation,there is a problem of "one release is chaotic".This has also been confirmed in the history of the development of Internet finance.Though P2 P is failure in China,but the development of P2 P provides a very good case for Internet financial regulation,let us think how to balance among development,fairness,economic efficiency and financial security and financial innovation.In the process of financial innovation,how to carry out institutional arrangements to prevent and control risks,and that is the core issue of what this paper studies.2.From the perspective of research,this paper intends to make a systematic and comprehensive analysis of the Internet financial regulatory system from the perspective of law and economics.Most of the existing literature qualitatively describes the risks of Internet finance or the problems in its operation,while the quantitative analysis articles also focus on the impact of Internet finance on a certain sector of the real economy,and lack of systematic and comprehensive legal and economic analysis on the Internet finance regulatory system.The purpose of government supervision is to promote the healthy development of the industry,but the impact of the system operation on the economy and the cost of the system operation are the issues that must be considered by the government supervision.Qualitative analysis cannot measure the cost and efficiency of the operation of the system,so it is very necessary to conduct empirical test of the cost and efficiency of the operation of the system,so as to provide scientific data support and theoretical support for the improvement of the Internet financial supervision system.3.The research of this paper can enrich the existing theories of financial supervision.Existing theories have a relatively complete theoretical expression for the access,exit and sustainable operation of financial institutions,but the development of Internet finance has posed a severe challenge to the existing financial regulation theories.From the perspective of the relationship between institutional change and Internet finance,Internet finance is to a large extent a product of China’s financial repression and a reaction to the spillover of the external effects of financial supervision(Yue Caishen,2014).Internet finance using Internet technology in aspects such as time,space,the transaction cost advantages,has realized the financial innovation,its products and the traditional financial products in terms of liquidity,profitability and risk are obviously different.So it’s very important to develop and improve the internet finance regulation system according to the Internet financial development characteristics and risk characteristics,what will be helpful to prevent the occurrence of systemic risk,and ensure the economic security.The practical significance of this paper is as follows:1.Provide a basis for the policy formulation of regulatory authorities.With the formulation and implementation of a series of regulatory rules and corresponding systems for Internet finance,the regulatory system of Internet finance industry has been improved day by day.The purpose of the establishment of the regulatory system is to ensure the healthy development of the industry.The evaluation of the economic performance of the regulatory system can provide a detailed basis for the improvement of the regulatory system.The research of this paper will also pay close attention to the problems in the operation of the Internet financial regulatory system,which can provide a basis for the policy improvement of the regulatory authorities.2.Provide reference for Internet financial companies and fintech companies to standardize corporate governance and business operation.For the development of Internet financial enterprises,gaining the trust of investors is the key to their business success,and compliance operation is the primary prerequisite for gaining the trust of investors.As a rational economic person for the purpose of profit,Internet financial enterprises will naturally calculate the costs and benefits of compliance operation.In this paper,the normative legal and economic analysis paradigm is adopted to conduct a comprehensive cost-benefit analysis and economic performance evaluation of the Internet financial supervision system.These studies can provide reference conclusions for Internet financial enterprises and provide reference for Internet financial enterprises to regulate corporate governance and business operation.3.Provide reference for investors to identify and prevent risks.After the Internet finance regulation rules and capital management plan were released,the Internet finance industry began to come under regulatory pressure from the government.Does this mean that investors are risk-free when investing in a compliant Internet financial platform?The purpose of the regulatory system is to protect the interests of investors and promote the healthy development of the industry,but the effect of the implementation of the regulatory system is still to be evaluated,and the degree of protection of investors is also to be studied.The research of this paper can provide reference for investors to identify and prevent risks.The research framework of this paper is divided into three parts: " what ought to be","what is reality" and "how to improve".This paper consists of six chapters,and focuses on the analysis of the regulatory system of Internet finance.The specific content is arranged as follows:The first chapter: the theoretical basis of Internet financial regulation.In this chapter,the author intends to briefly introduce the economic theoretical basis and legal theoretical basis for the legal and economic analysis of the Internet financial supervision system,and at the same time,define the Internet financial supervision and make an analysis with the aforementioned theories.In the basic part of economics theory,the main theories used include information economics theory and institutional economics.On the theoretical basis of law,the main theory used is the theory of moderate state intervention.After the definition of Internet finance and Internet finance supervision,this paper analyzes the defects existing in the Internet finance market with the above-mentioned theories,theoretically proves the necessity of Internet finance supervision,and summarizes the characteristics of Internet finance supervision.Chapter 2: Theoretical analysis of Internet financial regulation.This chapter is the "should be" part of Internet financial supervision.In this chapter,the analysis method of institutional economics and game theory is adopted.Firstly,the institutional economics is adopted to conduct demand-supply analysis of the Internet financial regulatory system.In addition,through game analysis,the necessity of Internet finance supervision is proved anthemically,and the external conditions necessary for the development of Internet finance are proved: perfect social credit system,investor protection system and legal system,etc.Chapter three: the current situation of China’s Internet financial supervision.This part is the "actual" part of the paper.This chapter analyzes the course and current situation of Internet financial supervision from the perspective of institutional change.Based on the analysis of the current situation,this paper discusses the problems existing in the Internet financial supervision system in the aspects of market access,fund storage and management,information disclosure and withdrawal mechanism.Chapter four: The performance evaluation of Internet financial supervision.This part is the "actual" part of the paper.This chapter mainly uses the cost-benefit analysis method to make descriptive analysis and chart analysis of the social benefits brought by Internet financial regulation.With the method of input-output analysis,this paper analyzes and evaluates the supervision efficiency of Internet financial supervision institutions.Finally,the econometric analysis model is constructed by using inter-provincial panel data,and the factors affecting the development level of Internet finance are empirically analyzed.Chapter 5: International reference of Internet financial supervision.This chapter mainly discusses the regulatory mode,principles and system of Internet finance in the United States and the United Kingdom,conducts in-depth analysis of the regulatory mode and system of various countries by means of comparative study,and summarizes the reference points for China’s Internet finance regulation.Chapter six: the conception of perfecting the supervision of Internet finance in China.This chapter mainly focuses on the regulatory model,the specific content of the regulatory system and the financial infrastructure.In terms of the regulatory model,the author believes that first of all,we should clarify the objectives and principles of regulation.In terms of the regulatory objectives,we should pay equal attention to preventing systemic risks and protecting the interests of investors.In terms of regulatory principles,scientific regulatory principles should be established to promote the perfection of the Internet financial regulatory system.In terms of the specific content of supervision,first of all,the market access system and exit mechanism should be improved from the minimum registered capital requirements,sponsors’ qualifications and other aspects,so as to build the first firewall of Internet financial risk prevention.Secondly,the regulatory standards should be improved from the perspectives of capital management,operation management and risk management,and the risk management of Internet finance should be strengthened,and the deterrence of penalty clauses should be strengthened.In terms of improving the financial infrastructure,it is necessary to consider improving the existing information disclosure system,strengthening the personal information protection mechanism,and improving the existing credit management system.