Research On Internet Financial Liquidity Risk Prevention And Control

In the beginning of 2013,with the development of the internet money market funds based on the third payment platforms,internet finance has made great progress.However,there are also some illegal trades beside the rapid development.Some internet finance companies do business in the legal limbo,which makes bad influence on the reputation of the new born industry.The supervisors introduce strict regulations to attack financial crimes.Only in this way can push on the sound development of this industry.We can make clear development scripts by studying the experience of developed countries,such as America,England and Europe union.In the process of the construction of internet finance system of our country,the profession must make it clear that the blossom of this industry should match the development of the country.And at present,the most important project of internet finance companies is the construction of risk management system.Many small companied even ignore the credit risk,which is the core risk of the financial industry.This is the reason causing so many scandals such as “roadrunners of CEO in many P2 P companies” and bankrupt of internet financial companies.The main challenge of this industry is how to set up the risk management system which is fitting to their needs.This paper uses GARCH group models to portray the wandering of yield rates of financial products,so that we can set up the foundation to measure the risk exposure through Value at Risk model.GARCH group models have been used a lot in the risk management branch of traditional finance industry.We can help the companies handle their risk exposure by analyzing the historic data,focusing on how to prevent and control the financial liquidity risk of the Internet,which can improve the anti-risk abilities.In the view of supervisors,they may make a balance between stimulating innovations and risk managements.The supervisors should lead this new industry to resolve some chronic diseases which has not been settled by traditional financial companies,including inclusive finance and the loans of small and micro businesses.The government should accelerate the construction of infrastructure facilities of finance,including the share of finance facilities to small finance companies and credit information system of the whole country.Only in this way can we make a Pareto Improvement of society utility.