Twofold Nature Of Local Governments' Financing And Investment Platform And Credit Risk Management Research

The local government have set up the investment and financing platform for infrastructure and urban construction financing from a long time, but investment and financing platform began to play a leading role in is the past year in dealing with financial crisis, and the functions of investment and financing platform are continuing expansion, from the original for financing urban infrastructure investment to a regional financing platform for cultivating leading enterprises and local state-owned enterprise reform platform.With the expansion of its functions, its own business scope, investment and financing tools have also been expanded and diversified, therefore, gradually exposing more risks and crises.In particular, since the first half of this year, the loose monetary policy in order to deal with the financial crisis brought about a substantial increase in credit, much of it flows to the government investment and financing platform, which caused the market to concern about such financing patterns and the risks of platform class enterprises.This study is from the risks faced by local government investment and financing platform, according to the dual background of its strong government background and market positioning, study its dual nature;and then by the potential conflict, analyze its credit risk; at last, from the two aspects of understanding and assessment the risk by banks, and the governance structure improve of local government investment and financing platform, and explore ways to improve the type of risk.The main innovation of this paper is reflected in three aspects:First, a new topic, which seize the current hot issues in economic development. The local government investment and financing platform is the platform for the infrastructure financing, integration of local resources,adjusting the industrial structure,to create the industry leading enterprise.In the national 4 trillion investments planning to stimulate the economy, large credit funds inflows into local government investment and financing platform, which brought great risk to local finance and the financial markets.We need urgently to conduct a targeted in-depth study. Second, a new research perspective.This study starts from the dual nature of local government investment and financing platform to explore the root of the problem, in order to provide a sufficient basis for follow-up study. The main biggest difference of local government investment and financing platform lies in a strong government background, which is not only its greatest strengths, but also means the specificity of its capital requirements and sources.It is just the contradictions of a strong government background and market positioning which lead to the special nature of the risk. The third is a new point of view. This analysis of the contradiction from the dual background of local investment and financing platform is a single innovation. The three kinds of contradictions from dual nature, that is, the contradictions between profitability of capital and investment are not entirely profitable, the contradictions between rent-seeking and the scientific of decision-making, the contradictions between old culture and market-oriented competition. All of them are the source of risks.