The Methodology Research On Credit Rating Of Local Government Financing Platform

Local government financing platform has been playing a more and more positive role in strengthening infrastructure construction and dealing with international financial crisis in recent years. However, it has also caused several problems, such as the over-expansion of debt financing scale, the growing debt risk, the weak consciousness and the ability in risk control of financial institutions. In the perspective of bank management, the first step of risk control is to improve and perfect the credit rating method, as well as to re-adjust the credit rating of financing platform. By introducing and analyzing credit rating method of commercial banks, the thesis reveals that they have not established a special credit rating system for local government financing platform. It also discovers that commercial banks are used to measuring profitability and risk by classic financial indicators. The thesis goes further to propose the suggestion that commercial banks should assess the prospective credit rating and ability by considering three aspects:integrity analysis, project risk analysis, and default risk. Further more, it points out that commercial banks should improve credit rating method, reinforce credit management, and enhance risk-control ability. This thesis provides a creative research on credit rating, and it has a certain reference value for commercial banks to improve credit rating method, risk identification, and thus guard against and defuse financial risk.