To Explore And Research The Risk Of Chinese Municipal Bonds-City Investment Bonds

As an effective financing method, City Construction investment bonds make a great contribution for the urban construction, which is the product of the socio-economic development for the special stage in China. City Construction investment bonds have played an important role in economic development and the capital markets. Recently, due to the lack of effective monitoring mechanism, and the continuous scale expansion, the risk of City Construction Investment Bonds is growing. "Scandal" of city construction investment bond has been come from time to time, which is great harm to the credibility and healthy of local government bond markets.In 2011, volatility of the City construction investment bond has shocked the bond market. Its performance attracts market participants'and scholars'attention They have given recommendations for company operation and policy.This article summarizes the risk for three areas:the causes of the financial system, the real estate industry and its own problems. There is a close relationship with finance, real estate and local financing platform. This will cause an enormous threat for Chinese macroeconomic.From these part, this article puts forward following suggestion to solve two relative problems.On the policy side, recommend to establish strict administrative evaluation process. Excluded land and real estate bubble in the high level of ability to pay the impact of weak fixed assets, according to solvency, the debt is divided into three investment classes. Our government has to choose the different policies to match any class of City Construction Investment Bond.The city construction investment bond has character of both government bonds and corporate bonds. According to this feature, The article is intended to study which character the City Construction investment will reflect in the different loose levels of monetary. In the study, the spread stands for character of Government or corporate, and Shibor measures how loose the monetary is. Finally, it reflects the character of corporate bonds in especially loose or especially tense monetary levels. And when the level of monetary is neutral, it reflects character of government bonds.This policy has some creative achievements on the discussion of the causes of risk, policy recommendations and the price mechanism from the city bonds. I believe this paper will give the reader some inspiration and reference.