Local Government Or Debt Risk Study

Local government contingent liabilities is the obligation of local government that is established by a particular law or contract, the government legally mandated to settle the obligation when it comes due , and the obligation that is not established by law or contract but is based on public expectations , political pressure, and the over all role of the society it.According to economics , risk is the possibility of loss , firstly it means the result is uncertain , uncertain means there are two or more results when particular things happen , secondly it means loss , the results of risk is a kind of loss , local government contingent liabilities risk is the possibility of loss caused by local government contingent liabilities.In our national the law are definitely in answer that local government can't run into debts, but the reality is the local government and functional department have borrowed a large number of debts directly or indirectly, for instance salary owing , fund shortfall of the endowment insurance , non-performing assets of the local financial institution etc . Such debts do not belong to local government on the names but the local government has to pay it finally, these debts all have uncertainty and are contingent liabilities. Up till now there is no department that can say clearly how many debts the local government of our country has on earth, if these debts outside the government's statistics and supervision for a long time its will become and bring out the financial crisis, So we must know the local government Contingent Liabilities and make appropriately analysis about its risk and reason of forming. This not merely contributes to us make reality effective measure to deal with the existing local government debts, and contributes to us to look for the effective methods to manage contingent liabilities of local government.This text firstly analyses the local government contingent liabilities and the risk theory, the forming of contingent liabilities. We probe into precautions to against the...