Analysis On Risk Spillover Effect Of Internet Finance Industryin China

Since Internet finance came into our vision,the public has launched various discussions on it,and related topics have never stopped.Internet finance is a new type of business which emerges after the integration of financial industry and network information technology.It is different from the direct financing mode such as stocks,and also from the indirect financing mode such as bank lending.It is more likely to conclude transactions through online trading platform between joint venture fund providers and fund demanders.Compared with traditional financial institutions,it has the advantages of low cost and high efficiency.In recent years,with the update and iteration of Internet information technology,the Internet financial industry has brought a rapid development trend.According to the monitoring data of relevant state departments,as of 2018,more than 65,000 Internet financial platforms have been included.In December 2018,more than 31,000 Internet financial websites were found to be abnormal,and 705 high-risk websites were systematically warned.A total of 1570 vulnerabilities have been found in Internet financial websites.The financial industry itself has the characteristics of high income and high risk.Its risks are characterized by uncertainty,high leverage and contagion.Internet technology has high technical risks,operational risks and account security risks.The integration of Internet and financial industry may result in greater risks in the market operation of the Internet financial industry,which is more contagious.The scope is wider.In order to further quantify the risks of the Internet financial industry,this paper will analyze the risk contagion between the Internet financial industry and the traditional financial industry.The theme of this paper is to measure the two-way Risk Spillover Effect between Internet financial industry and traditional financial industry.Firstly,it briefly introduces the general situation of the Internet financial industry;secondly,it analyses the risk contagion path between the Internet financial industry and the traditional financial industry on the realistic level;finally,it calculates the risk value of each industry by using the quantile regression method,and conducts quantitative research on the Risk Spillover Effect between the Internet financial industry and other industries.The empirical results show that the Internet financial industry has the greatest risk and the banking industry has the lowest risk because of its better risk control ability.There are different degrees of Risk Spillover Effects between Internet financial industry and traditional financial industry.At the 5% significant level,the Risk Spillover Effects between Internet financial industry and banking and insurance industry are negative,and the Risk Spillover Effects between securities industry and multi-financial services industry are positive.After analysis,the conclusion of the study is basically consistent with the reality.Based on the industry characteristics of banking,securities,insurance and multivariate financial services as well as the current development status of various industries,this paper makes a concrete analysis of the empirical results,and puts forward feasible suggestions on the future development direction of traditional financial industry and Internet financial industry according to the results.