Research On P2P Lending Regulation From The Perspective Of Game Theory

Regulation on domestic informal finance has been shifting from prohibition to lack of regulation then to support and now construction of regulatory system has started. This shift is a symbol of China’s fruitful financial and political reforms.Informal financial activities are quickly transferring to Internet platform via P2 P lending companies in recent years and becoming useful method for small companies and rural units to obtain credit. At the same time, P2 P lending industry and its participators are exposed to high risks due to lack of regulation. To establish a regulatory system which suits characteristics of P2 P lending industry is the requirement of customer protection and the intrinsic request of industrial development.Up to now the central bank and Banking Regulatory Commission of China are leading the construction of P2 P lending regulation system, which symbolizing a new phase in China’s regulation on informal finance. This article is aimed at analyzing the latest regulatory policies by applying relative theories to practices. It will mainly be based on game theory and this perspective of analysis will be broadened by introducing ethical issues in P2 P lending regulation. The article suggests that effective regulation on P2 P lending regulation as well as informal finance needs fostering common values of openness, equality, autonomy and grass roots initiatives between the regulators and the regulated. Only on basis of common values will the regulation system of “governmental regulation, self-regulation and ethical regulation”trinity take full effect and intrigue the identification and vitality inside the regulation system.