Research On Internet Finance And Risk Spillover Effect Of Chinese Traditional Financial Institutions

As a product of the integration of the Internet and the financial industry,Internet finance not only provides support and services for traditional financial models as a form of technology and operation,but also further breaks the traditional financial intermediation model,eliminates information asymmetry,and reduces transaction costs.Improve transaction efficiency and inject new vitality into the development of the financial industry.In 2013.Internet finance entered a stage of rapid development.While greatly improving economic efficiency,due to the imperfection of relevant regulatory systems,there was a great risk behind Intermet finance.2015 is considered to be the first year of supervision of Internet finance.A series of Internet financial supervision and management measures have been issued one after another.The most iconic document is the "Guiding Opinions on Promoting the Healthy Development of the Internet" promulgated on July 18.2015.As a result,China's Internet finance has entered an era of strict supervision.However,China's Internet finance is still full of risks and challenges,and with the increasingly close connection between Internet finance and the traditional financial industry,the effect of "leaving the whole body”has become more apparent.Therefore,it is necessary to study the spillover effects of Internet finance,judge the industry with the greatest risk spillover effect,and provide pre-warning and prevention for the transmission of extreme risks.This paper focuses on "Internet finance and the risk spillover effects of traditional financial institutions in China." Firstly,it reviews and summarizes the definitions of Internet finance by domestic and foreign scholars,the impact of Internet finance on traditional financial institutions and the measurement methods of risk spillover effects.Secondly,expounding the relevant theoretical basis and analyzing the risk spillover mechanism of traditional financial institutions by Internet finance;Thirdly,the status quo of Internet finance and its impact on traditional financial institutions Briefly summarized;finally,determining the proxy variables of Internet finance and traditional financial institutions according to the research content,and constructing the Vine-Copula Co VaR model The risk spillover effects of Internet finance and traditional financial institutions in China are measured.Based on the above research,this paper uses the 2013-1919 data of the China Securities Internet Financial Index and Shenwan Second Class Bank,brokerage,insurance,and other financial indices as an empirical research sample to build a relationship between Internet finance and traditional financial institutions.Relationships,in turn,measure the two-way risk spillover effect between Internet finance and traditional financial institutions.In addition,this paper also uses July 18,2015 as the time boundary to divide the two sub-periods,and measure the two-way risk spillover effects of Internet finance and traditional finance respectively and conduct comparative analysis.The empirical results show that:First,Internet finance and traditional financial institutions have significant two-way spillover effects and are asymmetric;secondly,Internet finance has a large risk spillover rate for Chinese banks and insurance institutions,but for securities institutions and other types.The risk spillover rate of financial institutions is relatively small.Third,after the policy attitude is reversed,the two-way risk spillover effect between Internet finance and traditional financial institutions has been significantly reduced.In summary,China's Internet finance is still in the early stage of development,and its ability to withstand risks is weak.Establishing effective regulatory measures in a timely manner can reduce the contagiousness of risks.The first innovation of this paper lies in the multi-dimensional perspective,the integration of traditional financial institutions into the scope of research,comprehensive consideration of the risk spillover effect between Internet finance and traditional financial institutions;the second is the study of financial institutions In this paper,the paper not only includes banks,insurance,and securities institutions,but also expands to other financial institutions such as trusts and leases that have a high contribution to systemic risk.The third is to consider the influence of policy factors and stage the policy attitude before and after the reversal.The study compares the changes in risk spillover effects between Internet finance and traditional financial institutions before and after the policy attitude is reversed and the regulation is tightened.