Game Theory Analysis of Chinese DC/EP Loan and Internet Loan Models in the Context of Regulatory Goals

Yuting Tu, Xin Yan () and Huan Wang
Additional contact information
Yuting Tu: School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100049, China
Xin Yan: College of Economics and Management, Beijing University of Technology, Beijing 100124, China
Huan Wang: College of Economics and Management, Beijing University of Technology, Beijing 100124, China

Sustainability, 2023, vol. 15, issue 9, 1-15

Abstract: The issuance of digital currency electronic payments (DC/EP), under the supervision of the People’s Bank of China, will have a certain impact on commercial banks, and will further affect the areas of internet finance and traditional financing. This paper studies the regulatory performance of DC/EP in the post-lending market under the models of internet finance and bank financing, exploring their theoretical and practical significance. Through the construction of an enterprise profit function and the regulatory utility function under the models of internet finance and bank financing, this study explores the impact of using DC/EP on the post-lending market. The study proves the following:In the absence of government regulation, internet finance platforms will increase the leverage ratio of loans, in order to obtain excess profits. The emergence of regulatory authorities and the use of DC/EP will control the leverage ratio of internet finance platforms, purify market performance, and stabilize the market order. The application of DC/EP provides a risk control method for the financial market, and coupled with government regulatory measures, it will effectively regulate the existing market order of internet finance platforms and increase the credibility of DC/EP. Therefore, the management insights obtained from this study of the application of DC/EP and the government regulation of existing financing and lending methods in the financial sector have practical significance for the current market.

Keywords: DC/EP; internet finance; leverage; regulatory effects (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/9/7025/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/9/7025/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:9:p:7025-:d:1129905

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().