Risks and Supervision of Internet Finance in China Based on : Diamond & Dybvig Model

This paper analyzed the current situation of internet finance risk and Internet finance supervision based on the definition and characteristics of internet finance. Clarified the differences between internet financial risks and traditional financial ones. Then, the formation of Internet finance risk was analyzed based on Diamond & Dybvig model. Some corresponding regulatory countermeasures are given for the supervision of Internet finance at last. In the future, with the innovative development of Internet finance, there will be new regulatory loopholes, which require the simultaneous improvement of legislative work. Through understanding the regulatory and legislative experience of European and American countries on Internet finance, legislative supervision is carried out in combination with the specific situation of China. Studies that causes and supervision of Internet financial risks in China. Clarifies the differences between internet financial risks and traditional financial ones. Then, the formation of Internet finance risk is analyzed based on Diamond & Dybvig model. Finally, some corresponding regulatory countermeasures are given for the supervision of Internet finance. In the future, the development and supervision of Internet finance will be coordinated. We should neither restrain development because of regulation nor ignore the occurrence of risks just for the sake of development. We should strive to build a sound financial system so that Internet finance can better serve the real economy.