The concept of Internet finance started from 2011, and it formed a blowout trend in 2013. It reached its peak in prosperity in 2014, and then in 2015, with the crisis of various mutual gold platforms, it even closed down, and finally the bubble of Internet finance. In 2016, it was punctured, and various mutual gold platforms have ran away. Many investors have lost money.
In 2014, when Internet finance was hot, many people around me were optimistic about Internet finance, because in their view, this Internet + financial model is the future development direction. At that time, the concept of “Internet +” was also popular. No matter what industry, it is necessary to have a relationship with the Internet.
I was very cautious about this kind of Internet finance. I think this is only a bubble. It will be pierced after a long time, because this so-called Internet finance model lacks a very important part. .
This ring is an effective and reasonable wind control.
Many people think that the key to doing finance is to increase investment income. The higher the return on investment, the more successful it will be.
Is this understanding wrong? That’s right, but this kind of understanding is not comprehensive, especially in financial investment, and this kind of understanding as an investment concept will have a fatal result.
Because we are reasonable in assessing the level of investment, we must not only look at the rate of return, but also the risk. Just like we are buying a computer, we must not only look at the performance, but also the price, which is what we usually call the price/performance ratio.
Putting it into financial investment means that we have to look at the income-to-risk ratio, and this income is the excess return, which is the rate of return of our investment income minus the standard rate of return. For example, we use the risk-free rate of 3% as the national debt. The standard rate of return, our investment yield is 8%, then the excess rate of return is 5% = 8% -3%.
So what is the risk?
For many people, risk is a very abstract concept. We often hear that investment is risky. We need to be cautious when entering the market, but we have never seen what the risk looks like. In fact, risk is a measure of uncertainty. The greater the certainty, the greater the risk.
Uncertainty can be expressed by volatility. The greater the volatility, the greater the risk. The fluctuation of bank deposit interest rate is small. We can say that the risk of bank deposit interest rate is small; the fluctuation of stock price is large, we can say that stock The risk of investment is large.
Investment profits and losses are often homogenous. This source is the volatility. If you invest in financial products that can increase by 5% in one day, it is possible to fall 5% in one day. Think about whether we are investing in stocks. Situation?
Effective risk management is fundamental to a stable and orderly financial investment. Without risk-controlled investment activities, like a wood without a wind, the wind will blow and immediately collapse.
So what is the operating model of the P2P platform?
The P2P platform is an intermediary that absorbs the funds of the depositor and then lends it to the borrower (borrower), which earns the spread.
At the beginning of the establishment of the P2P platform, it is the operating mode of commercial banks. The difference is that the deposit interest rate of P2P is much higher than the bank deposit interest rate, which is generally above 10%. In 2014, many depositors kept in the bank. Take out the money and take it to invest in P2P financing.
The bank deposit interest rate is only about 3%, and the wealth management products of the P2P platform can reach a yield of more than 10%. Such a good thing is a pie for the sky, and a lot of money can be used to buy P2P wealth management. Earn a yield of 7%, which is simply “risk-free arbitrage”!
So is this really risk-free arbitrage? The key to risk-free arbitrage is risk-free. Take the money that exists in the bank to buy P2P financing. Is there really no risk?
For a long time, the surplus funds of our depositors have existed in the banks, with stable and safe interest income. In their eyes, such deposits are the safest and risk-free. As for risky investments, such as stocks. Funds, they have tried, and have suffered from high risk, they have a certain understanding of high-risk and high-yield, but this understanding has not been derived from financial products that they have not experienced before, such as P2P. Financial management.
Since Internet finance was blown up in the past few years, there is a great need to unify the future financial market. Many people are fascinated by this illusion. The exaggerated propaganda makes them think that Internet finance is the future trend. Financial products are risk free.
It was not until the e-rental accident that they realized that the so-called high-yield, risk-free was a trick of deception, and the promised tall buildings were just a mirage.
Let’s take a look at the high returns promised by the P2P platform. If the P2P platform can really promise investors more than 10% yield, then the P2P platform must first find more than 10% of the investment projects, plus the operating costs of the P2P platform. Commission, P2P platform must at least find more than 12% of the investment rate of investment projects.
High-risk, high-yield, high-yield investment projects are accompanied by high risks. P2P platforms need to invest in high-risk projects to ensure such high returns. High risks mean high default rates and default losses. For example, the other party cannot repay the interest principal on time and on time, and the liquidity rate of the collateral is also very poor when the principal and interest cannot be repaid.
It is normal operation to find high-risk investment projects. After all, it is still investment, although it is high-risk, and some P2P platforms absorb only a small amount of funds to make investment, but most of the funds are invested. Infused into a pool of funds.
It is conceivable that in the face of the high rate of return demanded by investors, the P2P platform does not make external investments by itself, but only builds a pool of funds internally, which will have consequences.
The P2P platform does not generate investment income. It can only use the entrant’s principal to repay the interest of the first entrant. Until the game is completely unable to play and the capital chain is broken, these P2P platforms have gradually evolved into a Ponzi scheme.
The e-rental platform accident was also inevitable. Later, after investigation, it was found that most of the funds borrowed by e-rental were used to give luxury executives luxury and pay employees, which is equivalent to spending other people’s Money, enjoy your own wealth and wealth.
E-rental promised investors a yield of less than 10%, and it has not been able to sustain it. There are still many P2P platforms that directly promise investors a yield of more than 10%. In the end, they basically ran. To make investors lose their money.
I thought at first that e-rental was just not well-controlled, or the professionalism of the risk-control personnel was not enough. Until the subsequent more insider explosions, I realized that e-rental was a scam from start to finish. I didn’t think about risk control. I wanted to use the concept of internet finance to swindle people away. As a result, I found that the bigger the game, the more I couldn’t move.
In 2016, the state has successively issued a series of policies and regulations, strictly controlling the P2P platform. Many P2P platforms simply closed their doors, some of them are still struggling, and of course they are unwilling to fail. So they have transformed and started. Launched the “cash loan” business.
The P2P platform uses depositors’ money to lend, while the cash lending platform uses its own funds to lend.
If we make an analogy, the P2P platform uses debt to lend, while the cash lending platform uses equity to lend.
The microfinance companies we see in our daily lives use their own funds to lend. This self-owned fund can be jointly funded by several shareholders, but it can be donated by donors, and some are strictly passed. Procedures for obtaining funds from financial institutions, It should be noted that microfinance companies cannot absorb public deposits, so they do their own money and loss business.
In the past few years, China’s laws have stipulated that loan sharks that exceed four times the deposit interest rate are not protected by law. In recent years, this interest rate has been relaxed to 36%. The cash loan platform is similar to the microfinance company in life, and a lot of cash. The lending platform also sets the annual lending rate around 36%. Of course, some cash lending platforms are faced with users with very poor credit ratings. It is not unusual to set the lending rate to 100%.
This time, the country issued documents to rectify the cash loan of the Internet financial platform. It is also taking into account that the risk of this business is extremely expanding, and it is time to rectify it.
Since the cash lending platform is lending with its own funds and is responsible for its own profits and losses, even if the platform goes bankrupt, it will affect the platform itself. Is it so one-size-fits-all?
We all know that financial markets are conductive. If financial companies are allowed to gather risks, if they are blown up, the impact will be more than just a single platform, but the entire industry, or even the entire financial market. It is very necessary to take measures.
The banking industry has the strictest regulatory standards. There are Basel committees and major regulatory agencies. The history of banking supervision is a history of blood and tears. Today’s banking industry can operate steadily, and after stepping on countless pits. Only reached.
On the other hand, those Internet financial platforms, even those platforms that operate on their own funds, such as cash loans, seem to be self-financing, but in fact their sources of funding are not necessarily known to the outside world, especially in this industry. In the early stage of development, there are too many loopholes to be drilled. In order to protect the interests of the majority of financial users, the state also needs to regulate the development of this industry through policies.
Wind control is the key to financial investment. A sound financial market is a guarantee for the orderly development of all financial businesses.
The above article content carries the answer written by myself under this topic:
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