Research On The Risk Of Internet Finance And Its Prevention

The object of this paper is the risk of Internet Finance. Internet Finance has been developing rapidly over the years, as the Internet finance mode is constantly innovating, various business emerge in endless, and the scale of transactions presents a geometric growth. Like a corn has two sides, with the continuous penetration of various Internet financial business to people’s life, the Internet finance is the role of the double-sided, positive and negative. On the one hand, the Internet financial has brought a lot of convenience to people’s life, such as third-party payment platforms which help people save time and money, P2 P network lendings which facilitate small businesses and individuals loans, and crowdfunding that provides financial support for further development of creative works. On the other hand, the Internet financial has also brought a lot of risks to investors and consumers, such as third-party payment platformsmisappropriation of clients’ funds without heavy regulation, bosses of P2 P lending companies escape with investors’ funds, creative works are copied through crowdfunding platforms. As the Internet finance has drawn a lot of attention, this paper studies the Internet finance’s development and modes, analyses all the risks of it, such as systematic risk, technical risk, credit risk, and the risk of monetary policy. Then we sort out some typical countries or regions’ successful experience in guarding against the Internet financial risks and provide references for China. The dissertation consists of 6 parts, and chapter two, three, four and five constitute the body part.The first chapter is introduction, which mainly covers four aspects:first, the background,intention and signification of the study; second, the research methods and structure of the study; thirdly, the definition of the Internet finance, the theoretical basis of the Internet finance development, and the definition and trait of the Internet financial risk;fourthly, innovation of the study.The second chapter is literature review and analysis, from which we can see the advances on the study and point out the inadequacies, then, seek a new perspective for this paper.The third chapter describes the development of the Internet finance at home and abroad, analyses several major models of China’s Internet finance and concludes the following three characteristics: first, big data has been used more and more widely; second, the feature of low cost, low threshold and high yield is obvious; thirdly, the Internet finance and traditional finance feed each other, and the former displays a trend that it develops faster and faster, its business scope is wider and wider,its development needs heavier regulation.The fourth chapter analyses the risk of the Internet finance. This chapter begins with analysing 5 kinds of the Internet financial risks which are similar with traditional financial risks and its four kinds of specific risks; then, analyses its particularities in technical security and law and policy; next, analyses the risks of its several major models in order to seek appropriate remedy to guard risk.The fifth chapter discusses the prevention of the Internet financial risks. First, the chapter states how typical countries or regions such as America and European Union defense the Internet financial risks; second, summarizes the methods of risk management which aims at preventing systematic risks and credit risks; finally, puts forward some reasonable proposals for risk management on the basis of Chinese practical situation to promote the healthy and sustainable development of China’s Internet finance.The sixth chapter is the research conclusions that makes the argument more clear and logical.