Research On Risk Impact Of Government-trust Assembled Fund Products: Influenced By Local Government Financing Platform

With the sustainable development of financial industry, trust businesshas been expanded rapidly in recent years. At present, thousands of trustproducts flow into the market, which poses new challenges to riskmanagement of trust products. Not only does this put forward newrequirements to risk control department of trust companies, but also toadministrators.As for local government financing, banks have been under the windowguidance of China Banking Regulatory Commission (CBRC) and have beenlaid substantial emphasis on risk controlling in recent years. Due to theflexibility of trust companies, local government started to borrow from trustcompanies. There are huge amount of government-trust assembled fundsproducts which is based on the accounts receivables of local government in the market. At present, investors have concerns on the risks ofgovernment-trust assembled funds products, given long financing time oflocal government and repayment is highly dependent on land revenue. Tosome extent, this stimulated thinking on risk control of government-trustassembled funds products.This paper analyzed the development of trust industry in China byreferring to newest data, and presented the causes of formation, classification,and risk characteristics of trust products financed by local government. At thesame time, I proposed several control thinking and operation schemes ongovernment-trust assembled funds trust by focusing on financing of localgovernment and requirements of industry development.I stated short-term and long-term goals and characteristics of nationaltrust platform and local government financing trust platform. And I discussedhow to control risk of government-trust assembled funds products in thispaper. Furthermore, I elaborated feasible methods of recovering loans onlocal government platform, on the circumstance of possible losses forordinary investors.