Research on the Impact of Internet Finance on Risk Level of Commercial Banks

Abstract

The rapid development of Internet finance has continuously changed the mode of operation of China’s financial system. Under the backdrop of China’s entry into a new normal economy, slowing economic growth, and a grim situation, the impact of Internet finance on traditional financial models based on commercial banks is extremely huge and far-reaching. Therefore, we should thoroughly investigate the risk exposure of commercial banks in the context of Internet finance, study the two-way impact mechanism of Internet finance on bank risk exposure, and how Internet finance generally affects the risk behavior of banks. This stabilizes the Chinese banking industry and the stability of the entire financial system has important practical significance. This paper uses the loan loss readiness rate as an explanatory variable to try to model, construct the Internet index as an explanatory variable, and select the control variables from macroscopic and microscopic perspectives, including macroeconomic level, bank capital adequacy ratio, bank capital return rate, and banking concentration. Degree, bank loan-to-deposit ratio, and asset size, through the regression analysis of the GMM model, access to the data of 26 listed commercial banks from 2006 to 2016, striving to theoretically sort out the impact of Internet finance on commercial bank risk-taking, combined with empirical research . The in-depth study of the impact of Internet finance on commercial banks ’ risk-taking will provide theoretical and practical reference opinions for commercial banks to improve the risk-taking situation.