Research On The Impact Of Financial Innovation On The Risk Of Securities Market

Fund users are committed to improving the efficiency of financing,and financial innovation is one of the ways to maximize the benefits of capital use,Financial innovation has always supported the rapid development of the economy.However,the gloom of the financial crisis has been lingering,and whether financial innovation has increased financial risks has become a research hotspot for scholars.The predecessors analyzed the relationship between the two from a qualitative perspective.The conclusions of the study can be summarized as follows: The promotion of financial innovation to economic development is undeniable,but at the same time it also increases financial risk to a certain extent.Qualitative analysis from the theoretical point of view is sufficient,and mostly focuses on the impact of local financial innovation on local financial risks.There is still no consistent conclusion at the macro level.The securities market is the key component of the financial market and the barometer of the economic development.It can reflect the information of the vast majority of the economic operation.It is of great reference value to study the impact of financial innovation on the risk of the securities market.This paper attempts to study the relationship between the two from a quantitative perspective.On the one hand,it constructs a comprehensive evaluation index system of financial innovation with 11 sub-indicators,and then obtains a comprehensive index for measuring financial innovation level through principal component analysis.It is found that China's financial innovation has shown a significant upward trend,but in recent years,innovation volatility has intensified.On the other hand,we use stock market risk to replace financial market risk,select VaR(Value at Risk)to quantitatively describe risk,it is found that Chinese financial market risks are gradually rising in volatility,and there is an increasing trend of volatility.Finally,the VAR model is used to estimate the impact of financial innovation on financial risk.In order to improve the effect of model estimation,macroeconomic conditions,inflation rate and monthly lending rate are added as control variables.The results show that the impact of financial innovation on the risk of securities market is significant,which is consistent with the qualitative analysis results of previous scholars.The variance decomposition chart shows that financial innovation contributes about 16% to the volatility of financial market risk,indicating that financial innovation is an important but not the only factor causing financial risk.Policymakers and implementers should promote moderate innovation and strive to avoid risks while enjoying the benefits of financial innovation.In order to maximize the positive effect of financial innovation,the following suggestions are put forward: financial innovators take the initiative to carry out risk management and cooperate with the external supervision of the regulatory authorities to achieve common management;different regulatory departments cooperate to achieve synergy;and employ professionals with financial innovation experience to strengthen the regulatory team.