Research On The Risk Mechanism And Supervision Of Internet Finance

Internet finance has developed rapidly in recent years.It has triggered the refom of financial service mode,but has not changed the nature of finance.As the influence and scale of the Internet finance gradually expand,huge industry risk begin to emerge.Intemet financial risk not only comes from internal,such as imperfect market environment,credit investigation system,organization structure and trading mechanism,but also spread to other traditional financial markets and even the entire financial system through payment settlement,guarantee,consumer psychology and other aspects,thus causing the spillover of risks.Therefore,it is particularly urgent to study the risk mechanism of Internet finance and carry out the scientific risk regulatory mechanism.Aiming at studying the Internet financial risk mechanism and regulatory governance,this paper study in-depth on the endogenous risk and overflow mechanism of Internet finance based on the current situation of the Internet financial in China.By using the GARCH model family,the paper conducts an empirical study on the risks of P2P online loan market and the spillover effect to traditional financial markets.In order to further explore.the regulatory system,this paper makes a comparative analysis of the Internet financial supervision practice between Britain and America,then learn from the successful supervisory experience of the two countries.The empirical results show that the ARCH effect of China's P2P lending rate is significant,which is vulnerable to the impact of its own early fluctuations and the risk has a cumulative effect.As time goes by,the market volatility is decreasing.The leverage test shows positive leverage effect in the first and third stage,that means good news brings more volatility than bad news,which is contrary to the traditional financial markets.The results of three stages of risk spillovers show that the spillover effect is significant between online loan market and bank and stock market in the-second stage,which is a one-way risk spillover effect.However,there is no obvious risk linkage between online loan market and bond market.Finally,combining the reality of our Internet financial development background and the research results,this paper puts forward some policy suggestions from three main aspects:macro-prudential supervision,internal control of Internet financial enterprises,industry self-discipline and protection of financial consumers' rights and interests,so as to promote the sustainable development of the industry.