On China's P2P Financial Supervision System From The Event Of "Ezubao"

In recent years,due to the financing demands of small and medium-sized entreprises and the investment needs of small and medium investors,P2P network loan develops rapidly in China with the popularity of Internet transactions and the maturity of Internet technology.Meanwhile,events involved with problematic financing platform occur frequently and "Ezubao" is a typical one of them.In the charge of the management of the Anhui Yu Cheng Group,"Ezubao" came up on line in July 2014 and its illegal operation was exposed in December 2015.During a year and a half,through false projects,false guarantees,false promotion,etc.,"Ezubao"raised fund illegally for more than 500 million and the cumulative transaction amount of it was more than 700 million,with more than 90 million investors invovled.The event of "Ezubao" involved a huge amount of fund and had a wide and baneful impact.It is noteworthy that,Xinhua,China Central Television,Chinese Government Network and many other authoritative press offered positive publicity for "Ezubao"and guided investors to invest in it before the incident.So compared with other financing platforms with particularity,"Ezubao" is a more typical caseMost of the existing research focuses on how to determine the illegal nature of"Ezubao" fund-raisingcase and tries to explaine what kind of scam "Ezubao" is,from different angles.With the exploration as a breakthrough point,on why "Ezubao" could gain so much positive publicity before the case was exposed,this article analyses the characteristics of "Ezubao" and the origin of them.Through the analysis,the author believes that the root cause that "Ezubao" could get the identification from different parties is the supervision gap due to the unkown subject of regulators.This led to the possibilities of illegal operation for "Ezubao" and the failure of risk averse.On this basis,those behind "Ezubao" took advantage of the information assymetry,caused by the feature that investors obtain information in a passive way,and they also attracted the press' attention by following the policy focus of China."Ezubao" utilized the industry risk of P2P in common to establish an erroneous logic cognition,in order to have this tool well known soon.When the problems behind "Ezubao" and other similar internet loan platforms broke up,many internet loan administration policy,represented by "Network Lending Information Intermediary Business Activities Management Interim Regulations" were enacted.Based on the reflection of "Ezubaon" this dissertation introduces the content of the current regulatory system in China from the view of reducing the cost of supervisionand controlling the risk,and discusses the probable shortcomings of the regulatary system.The author believes that the current regulatory system of P2P in China keeps improving continuously and this is important for the regualtion of the development of P2P industry.At the same time,problems still exist in the current regulatory system,e.g.the legislation is sluggish and costly,the national information dissemination channels and rating standards are missing,the lack of supervision on the initiative of the regulators and the lack of detailed regulations on disposing the illegal internet loan platforms,which may lead to the cost of excecutory cost to keep increasing,etc.This dissertation also proposed suggestions for policy makers to deal with the above problems:a finance supervisonal system on P2P should be established in China;the institutional supervision should be promosted to transfer to the functional control;the national P2P network loan information query platform should be developed;a mechanism for disposing the illegal platforms should be founded;the constraints on the innitiative of regulators should be strengthened.