Study Of Municipal Bonds, The Legal System

Recently in China the local government financial crisis issue has attracted muchattention of the financial study, and there are many voice of giving the localgovernment the right to issue municipal bonds. Though there is a prohibition term oflocal governments in 'The Budget Act', many local governments actually raise debtsby issuing 'The Semi-Municipal Bond', a kind of bond in the form of corporate bondbut serve for the local government to invest in the local infrastructure. There are manyreasons for the local governments to issue The Semi-Municipal Bonds, but less of theaccording laws and intuitions the government debts are taking more risks and hazards.Endowing with the bond issuance right to the local governments will be the availablyremedy the local public finance gap and foster the local economic development. Butmost of all, is to set up a perfect set of rules for the municipal bonds of China.There is four parts in this thesis:The current study of municipal bond limited in the public finance and economicfields, there is little papers on the law and institutions. In the first part, the localChinese local government public finance is discussed. The legal risk and problems isdisclosed of the widely-used Semi-Municipal Bonds.In the second part, the international experiences will be employed. The practiceof The United States, Japan and Poland are introduced at length. The introductionfocuses on the law and institutions of the municipal bond and regulation of the bond.In the third part, the necessities and feasibilities of establishing the China localbond are discussed respectively. In the fourth part, the legal advices of China municipal bond system design aregiven. It includes the general principles of issuing, the supervision on the bond issuingand markets , the advice on reducing the risk of the local government municipal bonds,the related conditions of the system.