Research On The Risk Spillover Effect Of Internet Finance On Traditional Finance

At present,China’s financial market continues to innovate,and Internet finance,which is characterized by third-party payments,P2 P online loans and third-party financial transactions,is also rising rapidly.Since the emergence of Internet finance,it has brought new options for household saving decisions,and it will also affect the financing decisions of enterprises.While efficient use of financial resources brings higher benefits,risk events are also occurring due to a variety of reasons,including technical risks,business risks,operational risks,etc.These risks will be transferred to the traditional financial market,amplifying the risks of the traditional financial market.The risk transferred forms a superposition effect with the risk of traditional finance itself,which increases the risk impact of the entire financial market.The quantile regression method is a linear model in general,and the application of nonlinear models will be greatly reduced.Moreover,the residual setting is relatively simple,and the ARCH effect caused by volatility aggregation cannot be reasonably described.GARCH models mainly consider the heteroscedasticity of financial event series with volatility aggregation,and the volatility aggregation effect can be considered simultaneously relative to quantile regression.Its disadvantage is that the coefficient is assumed to be non negative,so random fluctuations may occur.Considering the advantages and disadvantages of the two models,this paper uses quantile regression and GARCH model combined with Co Va R method to analyze the size of the risk spillover of Internet finance to traditional finance,and uses the gray correlation model to make an empirical analysis of the size of each influencing factor affecting the channel.The empirical results show that the risk spillover of Internet finance to traditional finance exists among banking,securities and insurance industries,The banking industry is the most affected,followed by the insurance industry,and finally the securities industry.The degree of risk spillover was 48.96%,26.07% and7.63% respectively.The risk ranking conclusion obtained by using GARCH model is consistent with the quantile regression method,but the value is slightly different.Both models have passed the effectiveness test.From the perspective of LR statistics,the LR statistics of quantile regression Co Va R values of banking and insurance industries are higher,so the GARCH model is better,while the LR statistics of the securities industry’s GARCH model Co Va R values are higher than the quantile regression,and the quantile regression method is better.Therefore,in general,it is impossible to tell which model is better.Among the influencing factors in the grey correlation measurement,the degree of influence is technology,business,expectation and capital,with the values of 0.8658,0.8231 0.7825 and 0.5258,respectively.According to the above research conclusions,this paper finally puts forward suggestions on the sustainable development of Internet finance from these four aspects.