An Empirical Study On The Risk Prevention Of The Internet Money Market Fund In China

In early 1970s, the world’s first money market fund was born in the United States, which has been developed for more than forty years and become an important force in the international financial market. And money market fund in our country starts late, Hua’an cash rich investment fund sale as the symbol of official birth in 2003 December 14, then our country money funds presents a good development trend in the number and scale, and has become the important part of the fund market. Then, with the rapid development of large data, cloud computing, network payment, mobile payment and other information technology, the integration of the Internet and the financial industry is becoming more and more in-depth.2013 is known as the Internet financial year, which is treasure in the balance as the representative of the Internet financial products launched as a symbol. Its success propelled Celestica fund counter attack which has become the industry’s "boss", after many Internet companies launched the IMF financial products like balance of treasure. So it has brought a new development opportunity for the money market fund. "2015 years of the Internet Financial Consumes White Paper" statistics shows that the amount of money market funds at the end of 2011 from 294.895 billion yuan jumped to 44822.39 billion yuan at the end of 2015, so it can see that market will be more broad when money market funds is integration with the Internet, which is vigorously promoted the monetary fund market’s rapid development in an all-round way.With the balance of treasure as the dividing point, the definition of money market fund is also divided into two levels:First, the traditional money market funds (hereinafter referred to as the traditional monetary fund); second, Internet money fund. Traditional monetary fund simply refers to the investment in the money market in the short term (less than 1 year) of a securities investment fund. Internet monetary fund is extension of traditional monetary fund on the Internet platform, this paper will define it as a new Internet financial tools relying on the third party payment platform and with customers on the platform by idle fund companies, through investment in money market instruments and investment income. Compared with the traditional monetary fund, it has the following characteristics:low sales threshold, high profitability, daily income transfer, strong liquidity, new customer experience, high dependence; new marketing channels, low cost. Admittedly, along with the Internet, especially the outbreak of financial type of Internet hot monetary fund, the fund size of China’s money market showed rapid growth. As Internet and financial integration of innovation generated by the Internet fund, it has formed its own strong core competitiveness.This article is based on the hot financial background of Internet, which analysis the Internet monetary fund and the traditional monetary fund for comparison as the starting point, and in-depth analysis of the risks of Internet monetary fund operations and the need to strengthen risk management, not only let fund investors have a comprehensive understanding of IMF risk from the micro level, improve their risk awareness, but also causes policy’s attention to strengthen the risk management of IMF from the macro level, increase investment supervision and management, to promote China’s Internet fund bring the long-term healthy and stable development of important guiding significance.The article consists of six parts. First part briefly introduces the research background and significance of this paper, and then on the current research of IMF at home and abroad were reviewed, laid the theoretical basis and technical support for further research later. Second part describes the status, characteristics, the development status and influence of IMF in this paper. The third chapter and the fourth chapter is the key point of the paper, separately from the qualitative analysis and quantitative analysis of two points of view and profound the IMF Internet and traditional monetary fund which exist difference in risk. Qualitative analysis part through two operating mechanism of the Internet monetary fund and the traditional monetary fund, not only has the common risk, but also analyses the Internet monetary fund as contained in the innovation of financial tools has specific risk, thus highlighting the need to strengthen the risk management of Monetary Fund Internet. In the quantitative analysis part, the author further compares the Internet monetary fund and traditional monetary fund of the risk characteristics by using GARCH model. The empirical results, on the one hand reveals two kinds of money funds have non-normal resistance and wave agglomeration, which suggests that the development of money market funds in China is not mature, the market effectiveness is weak, and has much bigger market risk; On the other hand it reveals the Internet monetary fund in our country presents the characteristic of "high yield, low risk", but low risk does not mean no risk. Internet monetary fund income fluctuation presents time trend(i.e. conditional variances degeneration) enough to show that it has higher liquidity risk and policy risk. The fifth chapter is the focus of this paper, it mainly puts forward to strengthen the Internet monetary fund risk management policy recommendations from three aspects of government, industry and investors, which in order to improve the immunity system of internet currency fund, including the financial system of the Internet. The last part summarizes the full text, while clearly in the shortage of the research based on future directions for further research are put forward.