The Research On The System Of Local Government Bonds Risk Urecaution In China

In order to cope with the international financial crisis and maintain stable and rapiddevelopment of the domestic economy, Chinese government first issues the amount of200billion of local government bonds nationally in2009. As of2011, the central governmentissues local government bonds of200billion instead of local government each year, theselocal government bonds are mainly used for financing on commonweal projects andlivelihood construction projects of local government. As we see positive effects brought bylocal government bonds, we should see the risk factors faced in the process of issuing localgovernment bonds, only can we combine the positive effect of local debts with riskprecaution system design closely, local government bonds can really play the positive roleof promoting local economic and social development. Therefore, the starting point of thispaper is studying the potential risks of local government bonds issued, this paper is dividedinto five parts, and specific content is as follows:The first part: Discusses topic background and significance of this article, analyzesand summarizes the research status of local debts at home and abroad, elaborates the mainresearch ideas, methods and research contents, as well as shortcomings and innovations;The second part: Mainly explain relevant theories of local government bonds risk,including two parts, one is an overview of the theory of local government bonds; the otheris an overview of local government bonds risk theory; The third part: Mainly introducesthe successful experience of local government bonds risk precaution of the United States,Japan and other developed countries, compares and summarizes meaningful revelation oflocal government bonds risk precaution, provides a reference for the system design; Theforth part: Analysis of China’s local government bonds risk status. First introduces thecurrent development of local government bonds, and analyzes the risk in issuing,circulating, using and credit one by one, and makes use of the KMV model analyzingmethod, carries out an empirical analysis of local debt credit risk of the Inner MongoliaAutonomous Region; The final part: Local debt risk precaution system design. Summarizesand analyzes the successful experience of foreign local debt risk precaution, as well as therisks faced by local government bonds issued in China, tries to design local governmentbonds risk precaution system combined with China’s actual conditions.