Analysis The Credit Risk Of The Commercial Banks On The Basis Of The Local Platform

In response of the Financial Crisis which has been created by U.S. subprime mortgage crisis in2008, the government of our country adopted a series of plans to stimulate the economy. In order to financing, pass the existing policy and institutional barrier,The government in each local established platforms of local government, which can give financing, operating and investing service, instead of government direct borrowing. The platforms of local government give money to build the local public infrastructure and it has a good impact on treating the Financial Crisis. Under the impact of the "4trillion economic stimulus plan", the level of local government financing Platform developed rapidly. As the number of the financing increases, the risk of financing exploded. For one reason is that the number of financing sword rapidly as the platforms become more, and the platforms operate unformed with little money. Another reason is that the government guaranteed violated and the risk management awareness of commercial bank is weak. After the outbreak of debt crisis, the banks in Greece, Span, Portugal and other foreign countries have been merged and reorganized, which awakes the banking in China. On the Banking Bureau’s meeting in2013, the issue, the risk of the local financing platform’s loan, has been highlighted again. How to evaluate and prevent this risk became a problem for commercial banks that to be solved urgently.Based on the home and abroad related research, this paper aims at research the credit risk of the local financing platform. In the opening, the paper introduces the basic information, including the definition, characteristic, classification, background, development status and the role of the platform. Then, through compared the loan of the platform and the common company, we can get a conclusion that the risk of platform’s loan is not only attribute to the platform, but also to the local government and the countries’policies. Based on this conclusion, the research gives an analysis to the credit risk. Followed by, the research uses the Logistic model to analysis the credit risk of the platform in Hubei branch of S bank, which contains51platforms’ loan statistics of the bank. By analysis four aspects, the economic strength of local government, the degree of control over loan approval, the development of the regional economic and the operation and financial condition of the platform, we got the factors that affect the platforms’credit risk. Through testing the model, we knew it has a high accuracy. Commercial banks can use this model to determine whether they can lend to the platform. At last, on the basis of combining the theoretical analysis and empirical results, the paper put suggestions on preventing the risk from three sides, the bank, the platform and the local government.