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Academic Journal of Business & Management, 2022, 4(3); doi: 10.25236/AJBM.2022.040305.

The Internet Creates Increased Credit Default Risk for the Financial Industry


Kaiwen Zhang

Corresponding Author:
Kaiwen Zhang

International Accounting and Financial Management, University of Glasgow, Glasgow, the United Kingdom


The advent of the Internet has changed modern life, creating new opportunities in areas such as work, study and leisure. However, as a result of this new technology, many problems have also emerged at the same time. The purpose of this paper is to examine an important issue related to the Internet within the financial industry and the methods to solve it. This study shows that credit risk is one of the biggest risks of internet finance as the internet is a virtual trading platform. The increased default risk caused by information asymmetry that the Internet brings to the financial industry has two main consequences, namely the inability to recover the borrowed funds and the possible increase in the bankruptcy rate. In response to this risk, the establishment of an internet-based financial credit risk prevention and control system and enhanced dissemination and popularization of internet financial knowledge to the public can appropriately mitigate the higher credit default risk brought by the Internet to the financial industry.


Financial Industry; Internet; Credit Default Risk

Cite This Paper

Kaiwen Zhang. The Internet Creates Increased Credit Default Risk for the Financial Industry. Academic Journal of Business & Management (2022) Vol. 4, Issue 3: 27-29. https://doi.org/10.25236/AJBM.2022.040305.


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