Research On The Formation Mechanism Of P2P Network Borrowing Risk And Its Supervision

With the continuous development of Internet technology, communication technology and the gradual integration of the Internet and the financial sector, Internet finance has become the new spoiler of finance. With the convenience of the network, the Internet finance has accelerated the emergence of financial disintermediation, and indirect financial model of traditional commercial bank faces huge challenges. Of all Internet finance in emerging formats, P2P network lending model develop particularly rapidly. Through short, adaptable and fast lending practices, P2P lending platform’s target customers are small enterprises and individuals who are ignored traditional commercial banks. Through accurate market positioning, it effectively meets the needs of small and micro enterprises and individual financing, thus showing explosive growth. The P2P’s boom reflects that the traditional lending model cannot meet the actual needs of private lending. From the practice of Jiangsu, Zhejiang and other places, the potential lending need is huge, and most capital requirements are unable to obtain financing. From the aspect of investment channels, in the case of the stock market continuous decline, the capital surplus lacks of good investment vehicles and channels. Borrowers are unable to obtain financing service and lenders lack of investment channels, both of which have given rise to the development of P2P industry. Since the unbalanced regional economic development in our country, the disadvantaged and backward area lack inadequate financial services, P2P solved this dilemma means through the network.When P2P lending industry addresses the financing issues and improves the efficiency of capital allocation, it has also exposed a lot of risks. According to incomplete statistics, after October1th2013, there was a daily average of platform collapse, and there are also many platforms facing the risk of a run. In addition, many domestic P2P platform qualifications vary greatly. Because of the rapid expansion in the short-term interests drive, the risk has rising day by day. No matter the current network lending platform organizational structure or staff capacity, they are unable to take effective risk management measures. Given the rising P2P platform scale, P2P risks are increasingly exposed, which attracts extensive concern of industry experts and scholars. The discussion around the network lending and risk supervision floods in each big media and meeting. Recently regulators organized P2P industry research to seek views on regulatory policy. People generally appeal to standardize operations, prevent and control risk.Before the outbreak of lending platform P2P networks risk, through study of P2P networks lending business model and risk formation mechanism, we can accurately grasp critical risk points of network operators and process, helping the network lending platform take measures to control risk of each loan by improving operational mode and processes. In addition, in comparison the traditional loan with lending network model, highlighting the risk of the network which is different from traditional lending borrowing, contributing to the development of effective regulatory policies for the network lending, setting up barriers to entry from a system perspective, regularizing network behavior from the operational level, including implementation of risk warning and risk prevention mechanism. Through the study of foreign P2P network lending operators and regulatory, we can provide valuable reference for domestic P2P industry practitioners and regulators, so as to promote the healthy and sustainable development of P2P industry. In addition, research on P2P network lending risk and reply helps to further the theoretical system of lending risk research, in order to provide a reference for risk management theory and practice. Thus, research on risk and dealing with P2P lending network has great theoretical and practical significance.Given the importance of network lending risk research, this article from the perspective of the theory and practice tries to analyze the reasons for the formation of a network of lending risks and the main factors that affect the risk. And by reference to foreign borrowing of P2P network monitoring ideas, this article offers suggestions for domestic regulators to deal with our network lending. In the writing ideas, this paper firstly describes the theory of network-related lending risks and research progress through a literature review way. Followed by the introduction of commercial banks, private lending and network risk lending models, through comparative study we conclude prominent risk types which are different from traditional lending patterns. Before analysis of network lending risk formation factors, we introduce the current development status of network lending industry current situation and supervision situation. As a foreshadowing, then we do a comprehensive analysis and conclude the systemic and non-systemic factors which influence network lending risk. The latter article constructs an external supervision system of P2P and puts forward policy recommendations based on the above analysis, which focuses on the aspects of regulatory capital and the legal system by drawing on the experience of foreign network lending regulatory.However, this article does not do the quantitative analysis of P2P platform for each risk factor because of the inconvenience of P2P network platform data acquisition. With the standardization of the network lending platform development, the transaction data would be disclosed in the industry association. Then it will be possible to measure network lending risks based on the platform data. In addition, the author lacks of experience in the industry, and cannot understand lots of risk management theory. So net loan practitioners can also raised more workable means of risk control from a practical point to view credit risk management, which will improve net loan risk control research in theory and practical aspects.