Macroeconomics and FinTech: Uncovering Latent Macroeconomic Effects on Peer-to-Peer Lending

10/31/2017
by   Jessica Foo, et al.
0

Peer-to-peer (P2P) lending is a fast growing financial technology (FinTech) trend that is displacing traditional retail banking. Studies on P2P lending have focused on predicting individual interest rates or default probabilities. However, the relationship between aggregated P2P interest rates and the general economy will be of interest to investors and borrowers as the P2P credit market matures. We show that the variation in P2P interest rates across grade types are determined by three macroeconomic latent factors formed by Canonical Correlation Analysis (CCA) - macro default, investor uncertainty, and the fundamental value of the market. However, the variation in P2P interest rates across term types cannot be explained by the general economy.

READ FULL TEXT

page 1

page 2

page 3

page 4

research
02/13/2019

Modeling default rate in P2P lending via LSTM

With the fast development of peer to peer (P2P) lending, financial insti...
research
07/20/2019

Recommendation Engine for Lower Interest Borrowing on Peer to Peer Lending (P2PL) Platform

Online Peer to Peer Lending (P2PL) systems connect lenders and borrowers...
research
08/22/2018

Peer to Peer Sharing of Distributed Energy Resources

As the penetration of distributed energy resources in the residential se...
research
09/09/2020

Improving Investment Suggestions for Peer-to-Peer (P2P) Lending via Integrating Credit Scoring into Profit Scoring

In the peer-to-peer (P2P) lending market, lenders lend the money to the ...
research
03/02/2020

Towards Peer-to-Peer Energy Market: an Overview

This paper provides an overview of the current status of the energy mark...
research
04/25/2018

Disentangling and Assessing Uncertainties in Multiperiod Corporate Default Risk Predictions

Measuring the corporate default risk is broadly important in economics a...
research
06/29/2018

Using General Adversarial Networks for Marketing: A Case Study of Airbnb

In this paper, we examine the use case of general adversarial networks (...

Please sign up or login with your details

Forgot password? Click here to reset