Research On Risk And Regulatory Framework Of Internet Finance

In recent years, with the development of Internet technology and the popularityof mobile Internet, the internet finance which depends on internet to pay fund, makean accommodation and provide information intermediary services has had a rapiddevelopment. As a traditional financial supplement, internet finance which plays animportant role in improving the minor enterprise financing environment, optimizingresource allocation, improving transaction efficiency and enriching the way ofinvestment, provides a new developing opportunities for the whole financial system.However, the financial risk in the process of Internet finance development is alsogrowing, so it is necessary to supervise the internet finance properly. The generalprinciple of supervision is finding a proper degree between encouraging innovationand preventing risk. Thus, the internet finance can keep going in a sustainable andhealthy way, and serve the real economy better. Currently, the regulatory model hasbeen basically decided to follow the sub-sector regulatory model in financial industry.The central bank is responsible for supervision of Internet payments, the CBRC isresponsible for supervision of P2P, the Commission is responsible for supervision ofthe public to raise equity, and the China Insurance Regulatory Commission overseesthe Internet insurance business. When the regulatory body is determined, it isnecessary to clear the regulatory principles, content and approaches. With theconstruction of legal system, it is easy to regulate the development of industry. Theself-discipline construction of industry and internet finance industry associations canimprove the development of industry. It can decrease the industry risk efficientlythrough the reinforcement of the credit system construction, information sharingmechanism that can establish a national network of personal information database. Inthis way, we can build an internet finance regulatory framework that meets thedevelopment of financial market, international trends and policy orientation. Thefinance internet industry will be improved in a healthy and orderly way throughcontrolling the risk.The paper is composed of six parts. The first chapter is an introduction of thebackground and significance, literature review, research ideas, methods andinnovations. In the second chapter, it is introduction of the current development ofChina’s Internet finance which is presented from the aspects of the connotation of theInternet, the development context and major formats. The third chapter is the internetfinancial risk research in China. It is mainly about the general and specific risks faced by Internet finance. The internet finance risk is composed by liquidity risk, credit risk,market risk, operational risk, legal risk and technical risk，and then, a comparativestudy is carried out for risk control measures of a part of P2P enterprise. The fourthchapter is the comparison of internet finance supervision system. It introduces theregulatory experience of foreign countries, and evaluates the strengths andweaknesses of the domestic regulatory system. The fifth chapter is therecommendations about how to improve China’s Internet financial regulatory system.The main suggestions and ideas contain the aspects of the regulatory body, principles,content, regulation, protection and others. The sixth chapter is the conclusion, whichsummarizes the full text, and puts forward the author’s point about the internetfinance regulation.