Systemic Financial Risk Contagion Effects: An Analysis from the Perspective of FinTech Empowerment
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Abstract
The development of FinTech empowers traditional financial institutions with new business models and operation methods. At the same time, it also leads to high risk-taking of financial institutions and poses regulatory challenges to the financial system, threatening financial stability and accumulating potential systemic financial risks. From the perspective of FinTech empowerment, this paper takes Chinese financial market data from 2015 to 2024 as samples, applies the SIRS epidemic model, DCC-GARCH model and network analysis method, and explores the internal mechanism, key paths and heterogeneous characteristics of FinTech affecting systemic financial risk contagion. The study finds that FinTech has a “dual effect” on systemic financial risk contagion: on the one hand, it restrains risk contagion by alleviating information asymmetry, optimizing risk early warning systems and improving resource allocation efficiency through technological empowerment; on the other hand, it intensifies contagion by enhancing the correlation of financial institutions, amplifying technical vulnerability risks and accelerating risk diffusion. Risk contagion shows network-based characteristics across institutions and markets, with the banking industry as the core node of risk contagion, and the securities industry, insurance industry and FinTech companies as important transmission intermediaries. The development level of FinTech, institution type and regulatory intensity significantly affect the risk contagion effect. Finally, this paper puts forward countermeasures from three dimensions: technological innovation, risk prevention and control, and regulatory improvement, providing references for preventing and resolving systemic financial risks.
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