TITLE:
Research on the Impact of Internet Finance on Risk Level of Commercial Banks
AUTHORS:
Wenlin Liao
KEYWORDS:
Internet Finance, Commercial Bank, Risk Taking
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.8 No.4,
April
28,
2018
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.