the first is the risk of credit default, that is, whether the Internet wealth management products can achieve their promised investment return rate. The global economic growth is sluggish, the potential growth rate of China's economy is declining, the domestic manufacturing industry is generally overcapacity, the domestic service industry is not open enough, and the risks of the shadow banking system are gradually emerging.

the second is the risk of maturity mismatch, that is, the investment assets of Internet wealth management products have a long maturity, while the liabilities have a short maturity. Once the liabilities cannot be rolled on time, liquidity risk may occur. Of course, a major function of financial institutions is to convert short-term funds into long-term funds, so financial institutions will face different degrees of maturity mismatch, and the key is the degree of mismatch.

the third is lender of last resort risk. Although commercial banks also face the risk of maturity mismatch, and the wealth management products issued by commercial banks also face the risk of credit default and maturity mismatch, an important difference compared with internet finance is that commercial banks can finally get the lender of last resort support provided by the central bank. Of course, this support comes at a great cost, for example, commercial banks must pay 2% of the statutory deposit reserve, their own capital adequacy ratio must be higher than 8%, and they must meet the requirements of

regulatory agencies on risk provision and liquidity ratio. In contrast, Internet finance is currently facing a pattern of lack of supervision, so its operating cost is low and it lacks lender of last resort protection.

in addition to the above-mentioned traditional risks, China's internet financial products also face a series of unique risks:

one is legal risks. At present, the internet finance industry is still in a state of no threshold, no standard and no supervision. This leads some Internet financial products (especially wealth management products) to wander in the gray area between legal and illegal, and may touch the high-voltage line of "illegally absorbing public deposits" or "illegally raising funds" with a little carelessness.

Secondly, it makes it more difficult for the central bank to regulate money and credit. On the one hand, the innovation of internet finance makes the central bank's traditional intermediate goal of monetary policy face a series of challenges. For example, should virtual currency (such as Q currency) be included in M1? For another example, because Internet finance companies are not bound by the statutory deposit reserve system, this actually leads to the amplification of the currency multiplier.

the third is the risk of personal credit information being abused. First of all, through data mining and data analysis, Internet finance enterprises obtain personal and corporate credit information and use it as the main basis for credit rating. Secondly, whether the information obtained through the above channels can truly measure the credit risk of the rated subject comprehensively and accurately, and whether there are selective bias and systematic bias.

the fourth issue is information asymmetry and information transparency. As mentioned earlier, the Internet finance industry is currently in a state of lack of supervision. Is there an independent third party that can manage this risk? How to prevent the Internet finance enterprises from self-stealing. After all, relevant surveys show that only about 2% of Internet P2P companies have professional risk control teams.

the fifth is technical risk. Unlike traditional commercial banks, which have a highly independent communication network, Internet finance enterprises are in an open network communication system, and the security of TCP/IP protocol itself is facing great criticism. At the same time, the current key management and < P > encryption technology are not perfect, which makes the Internet finance system vulnerable to computer viruses and network hackers. At present, considering the high risk of internet financial accounts being stolen, many people are prevented from participating in internet finance, among which there are by no means professional financial or IT professionals. Therefore, Internet companies must continue to invest heavily in their own trading systems and data systems to ensure security, which will undoubtedly increase the operating costs of Internet finance companies and weaken their cost advantages over traditional financial industries.

To sum up, since Internet finance enterprises in China are facing so many risks at the initial stage, should this be used as an excuse to slow down or even stifle this valuable financial innovation? The answer is naturally no. All parties concerned should fully consider the potential risks and promote the steady and sustainable development of Internet finance.

Relevant suggestions include:

First, we should fully strengthen industry self-discipline. Replacing government approval with industry access will help to standardize the development of the industry and avoid excessive government intervention by strengthening the role of industry associations. The current Zhongguancun Internet Finance Industry Association and the Internet Finance Thousand People's Meeting are all beneficial attempts;

Second, we should strengthen investor education and fully remind investors of the possible risks of investing in Internet financial products, and this risk is significantly higher than that of investing in similar traditional financial products;

Thirdly, network security management should be strengthened to prevent system paralysis caused by hacker attacks from a higher level;

fourthly, regulators should build a flexible, targeted and flexible regulatory system, which should not only make up for the lack of supervision, but also avoid excessive supervision.