Research On Standard Development Of Local Government Financial Platform In China

Since the US financial crisis, the capital construction upsurge caused by our4trillion economic stimulus plans has made the cooperation active unprecedentedly between the local government financial platform and the financial institution. The credit scale based on local government financial platform expands rapidly as herding effect, and this triggers dual worries, the fiscal of credit and the credit of fiscal. Up to June2010, our credit amount of local financial platform has reached7.66trillion, which including problem loans over20thousand pen, involving amount of2trillion. Although the local government’s overall debt level is still under safety range, as a result of many uncertain factors, the potential risks of local government financial platform have become a realistic hidden trouble, inducing systematic financial risk.From the viewpoints of relationship between the government and market, the market enhancing and government-financial theory, this paper analyzes formation mechanism, evolution process and function orientation of the local government financial platform, comes out that the local government financial platform is a special expression, and then builds the function framework to remedy market failure, regulate economic imbalances and develop the state-owned economy.On this basis, analyzing the history evolution and present development situation of local government financial platform, this paper constructs an analysis framework about the risk type and influencing factors. Put forward the main problem for standard platform Is recognizing risk essence and clear governance key.For measuring the debt scale of financial platform, it is conclude that, the balance of loans reached the peak value with the range from7.66trillion to7.86trillion by the end of2010, while the debt scale achieved the peak value with the range from2.12trillion to2.14trillion by the end of2012. By using the scenario analysis method, local government’debt paying ability is analyzed. Results show that the debt servicing ratio maintains in basically25percent as the security cordon during the period from2009to2015, the repayment peak period is from2011to2013. And the local government debt servicing ratio achieves top with the range from30.03percent to36.03percent.Futher mining the game analysis of dynamic evolutionary about the behavior between the interests of local government financial platform is conducted. Results show that, without the central government supervision, both local government and banks have the motivation to support the development of the financial platform excessively, but still part of them don’t support it considering the risks. With the central government supervision, the utility function of local government and banks will change, for the support-motivation should mainly consider the interests.At last, this paper puts forward the realistic policy proposal, transforming the government financial platform to special purpose company, the government credit to corporate credit, implicit liabilities to explicit liabilities, remedial afterward to prior warming, and traditional financing to multiplex financing.