The Risks And Legal Regulation Of The P2P Network Lending

P2P, also named peer to peer network lending, is the abbreviation for person-to-person lending or peer-to-peer lending. It is a kind of lending mode operated on the Internet. P2 P first emerged in England in 2005 and spread rapidly throughout the world. The advanced Internet technology has played a key role in the emergent and development of P2 P. It is exactly the integration of folk microfinance and Internet technology that generates this newborn lending. Based on the Internet, P2 P makes folk microfinance faster and more convenient. It not only reduces the difficulty of financing for most middle and minor enterprises, but also broadens the investment channels of the citizen, thus making “Financial Inclusion” possible. However, any newborn thing has its advantages and disadvantages, so does P2 P. Because of the inner deficiency and acquired deficiency of environment, P2 P may bring a series of risks that can have strong impact on the whole financial system. It is necessary to get P2 P in control through rules and regulations so that it will develop healthily and orderly along the law-ruling track.In addition to the introduction and conclusion, this paper is composed of the following five parts:The first part is a general interpretation of P2 P which mainly include the following contents: Firstly, based on the background and the operating mechanism of P2 P, the author tries to put forward a more appropriate definition of P2 P. Secondly, the emergence and development history of P2 P is introduced from aspects of both home and abroad. Thirdly, a detailed analysis of P2P’s characteristics and typical operating mode at home and abroad is presented to the reader so that they can get a basic knowledge of it.The second part of the paper is a systematic description of the various risks we may face during the operation of P2 P. At the risk description part of this paper, the author creatively use risk analysis method to control the overall risk of P2 P by analyzing the participants’ risks one after the other.In the third, fourth and fifth parts, the author discusses about construction of the P2P’s legal system of risk control. After an overview of advanced experience of foreign developed countries, such as the United Kingdom, the United States and France, the author summarizes their characteristics of P2 P credit risk control legal system and at the same time finds out deficiencies in the risk control legal system of China. Eventually, the author accordingly gives a targeting station toward the construction of China’s P2 P risk control legal system.