Fintech Regulation and Too-Big-To-Fail Perception : Evidence from the Registration Requirements on Chinese Peer-To-Peer Platforms

Despite repeated calls for fintech regulations, the impact of looming fintech regulations is still unclear. This paper uses the event of uniformly implementing registration requirements in Chinese peer-to-peer (P2P) industry to answer this question. The results show that, even though the registration requirements have helped to clean up problem platforms and lower loan yield, the requirements have, in general led to significant outflows of investors and borrowers from P2P platforms. However, the TBTF perception has offset most of the impact of the registration requirements, and more interestingly, none of the other certification channels documented by literature can provide similar functions