Shadow Banking in a Crisis: Evidence from FinTech During COVID-19

Research
,
1

Hi all,

Here’s our paper on the economic consequences of COVID-19 on financial institutions in China. Combining two representative samples of FinTech and bank loan records spanning the outbreak of the COVID pandemic, we provide the first evidence on the fragility of the Chinese FinTech industry. The delinquency rate is more than tripled after the pandemic outbreak for FinTech loans, but there is no significant change in bank loans rate.

This is preliminary work and any comments very welcome.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3734770

Thanks!

2

@Difang_Huang_Monash_University Interesting study. On Table 2: The coefficient on Age is 0.000. Did you try to normalize it? Was there any size effect here? Did you happen to try some neural network models to see if the results are confirmed? Is the -0.028 for male for male=1 (meaning, being male reduces the probability of default)? That’s surprising to me.

3

Thank you very much. The reason for coefficient on Age is about 0.000 is that we are running multiple regression and the variance of age is not large, therefore the explanation power for this particular term is negligible. The same reason applies for the Gender coefficient. Second, we tried to use the neural network to explain the potential nonlinear relationship between each variables but the model is too complex and difficult to interpret. Thanks.

4

@Difang_Huang_Monash_University Hello there. Would you like to present your research in a placekey webinar ?