To see the development of internet finance from five angles

After 2013 years of development of internet finance, the Internet Financial Innovation model represented by third party payment, Peer-to-peer Network loan, public financing, large data finance and so on has developed rapidly, and has brought the impact to traditional finance, meanwhile, it also shows various negative signs. For the first time in the 2014 government work report, "Promoting the healthy development of internet finance" has pointed out the direction for the development of internet finance. However, how to deal with the relationship between financial innovation and financial risk? How to understand the position of internet finance in China's financial system? How to promote the financial reform in the Internet age? What kind of policy environment does the internet finance development need? These questions need to be discussed in depth.

This article is Huang in the summary of the internal symposium of "Internet Finance development and future: Policy Angle". Huang, senior researcher of Chong Yang Institute of Finance, Renmin University of China.

After 2013 years of development of internet finance, the Internet Financial Innovation model represented by third party payment, Peer-to-peer Network loan, public financing, large data finance and so on has developed rapidly, and has brought the impact to the traditional finance, at the same time, it also shows all kinds of negative signs. For the first time in the 2014 government work report, "Promoting the healthy development of internet finance" has pointed out the direction for the development of internet finance. However, how to deal with the relationship between financial innovation and financial risk? How to understand the position of internet finance in China's financial system? How to promote the financial reform in the Internet age? What kind of policy environment does the internet finance development need? These questions need to be discussed in depth.

We need a big frame of mind to see the development and future of Internet finance:

First, the Internet thinking must be facing the future, we are now a lot of research and discussion from now on, and the future is not enough, to from a certain point in the future to look back, so more reasonable.

Second, from the system or from the bottom to see the problem. Our entrepreneurs are starting from the bottom, and that the internet is grassroots finance, is constantly through the catfish effect caused by the big changes in finance, but the top is from the top down, found that the financial industry needs to comb, need to change.

Third, starting from the market or from the government to see the problem. People from the market call for government regulation and demand legislation. In fact, it requires government endorsement. The government is now moving towards the rule of law, the prime minister said no ban can be, but the people are accustomed to supervision, no law agreed to feel uncomfortable, the other side is also afraid of others to manage their own, want to find a government credit to endorse.

Four, from the static angle of view or dynamic perspective. It is impossible for us to put forward a policy once and for all, and it is impossible to be far-sighted and to complete the future legislation. I think the stage curing some things can, but not in the form of legislation, in the form of legislation will produce the ills of law:

1. Loopholes in the law, there will always be a new loophole in the law immediately, it is their own slap on the face, patching, do not play patches are very embarrassing things.

2. The lag of the law, the Internet innovation so fast, just legislation and backward, and even no value.

3. Conflict of laws. Through the legislation in the real condition or our department-led, each stand in their own interests, resulting in the conflict of laws, coordination is still very troublesome. These problems in the dynamics of how slowly groping, running-in, adjustment will be more appropriate.

Five, from an isolated department or from a system perspective. One of the characteristics of the internet age, all are connected together, is interconnected. This will happen if you come up with a future conflict with another department. So I think in the current, we have to rearrange the mind and the frame of mind, rather than the Internet financial how many models, how many levels, we are not a better understanding of the logical framework of Internet finance, this is our first task.

Therefore, we need to design the development path of Internet finance from the following aspects:

First, from the perspective of industrial ecology, industrial ecology has the elimination mechanism of the market, giving full play to the role of the invisible hand of the market. Because each thing on the internet interdependence, mutual restraint, it will be symbiotic will have the mechanism of elimination, so first play the role of the market.

Second, to let the interests of the first game, the interests of the main body of the game is the most easy to form a rule, our contract, our market transactions, both sides must seek a rule that everyone can accept, before they can reach a contract. In the same way, it is more important to introduce game theory to the deep mechanism of Internet financial rules, and do not attempt to get a great legislator.

Third, from the bottom to see how the rules form, is the evolution of their own order and refinement. The formation of order, a kind of foreign order, transplant order will certainly fail, only endogenous evolution, the order of their own vitality.

We now need to use the development of the Internet to form an endogenous exploration of the deep mechanism and evolution mechanism of Chinese native, this kind of birth order from different main body then gradually ascend. How to evolve from the market to society, and then to the government, this can be a layer of level of improvement.

Enterprises can make their own rules, by combing their own processes, standards, the formation of enterprise standards, business processes, and then come in to upgrade to become the industry standards, industry processes, industry practices, industry conventions. Industry practice has the meaning of legislation, which in our national law has reached a consensus, the court can be based on the practice of the industry to decide, at this time no need for a department to stand. When the court's verdict confirms that it will be enacted in the future, it can be absorbed. This constant evolution, ascension, refinement, discovery, coupled with the process of solidification, is the time when we need to rethink our legislative wisdom.

Four, from the whole big frame, the government, market, the social three parts of the interaction and collaboration to explore the Internet financial governance mechanism, the market often because the invisible hand can not lead to market failure, the government visible hand is too rigid, a tube of death, so need a new concept, China now to cultivate the development of the third sector, social organizations. Nurturing the third sector will form a new hand, called a flexible hand. The invisible hand and the visible hand are combined into the flexible hand to complement each other, so that the three departments coordinate each other and form a new governance structure and governance model. How to make the hand of flexibility work, I propose two concepts, to flexible regulation and soft governance, in the iterative evolution to improve our governance strategy and legal rules.

Flexible supervision, regulation should be flexible, government departments are visible hand, is rigid, to use the flexible hand of society to develop some rules, set some standards, the formation of a number of conventions, so that the market and the Government to form an effective buffer zone and communication mechanism.

Soft law governance, social legislation is a kind of legislation, industry practice formation, the formulation of conventions, this is a kind of social legislation. Let the social level, the local level first exploration, so called soft law, when the experiment succeeds, we again turn it into hard law, solidify down, become our country's legislation. In this way, the use of the Internet's iterative thinking to improve our standardized strategy.

Of course, the great technology of the Internet has led to the revolution in financial innovation, and it is only just beginning, and we should immediately proceed to do the following things:

First, to continue to encourage technological innovation, no technology innovation, no Chinese original technology, everything is foreign things, controlled, such as server problems, domain name resolution problem, a series of problems are subject to the United States, do not crack these technical basic problems, our results will be picked away.

Second, adhere to the principle of the bottom line, one is from the bottom line of the form, the existing law to clear the Act of crime you can not touch it; second, the risk bottom line, can not occur systemic risk and regional risk; third, the safety bottom line, internet finance must ensure the security of the system.

The government's main work at this stage should be observation, in fact, this is also a kind of care for internet finance, when there are problems to crack down on the law, this is a kind of bottom line of care, so that the upper limit, encourage innovation, can truly achieve the healthy development of internet finance.

(Responsible editor: Lvguang)