A Study On Legal Prevention Of Local Government’s Debt Risk

Because of our financial system and the uncertainty of some economic factors, our revenue can’t repay the debt,resulting the fiscal imbalances of our local government and undermining the stability of the fiscal, then the local government lost their credit and damage the possibility of our country’s economic development,that’s what the local government debt risk means. Divided from the manifestation of local government debt risk, the risk can be divided into debt scale risk, debt capital efficiency and and debt management risk.But divided from the objection of the result, the risk can be divided into fiscal risk, financial risk and social risk.There are some main causes of local government debt for example:the local government lack of the awareness of the debt risk,the standardized management of local government debt, the imperfect financial system, the imperfect government transfer payment system and the imperfect appointment and assessment mechanism. Because of the risk of local government debt might harm our country’s fiscal system, the financial system and even the whole community, our country must take effective measures to prevent local government debt risk, especially take the way of the law.Only this way can we ensure that the purpose of effectively prevent and resolve of local government debt risks. Currently, there are still have some problems about our local government debt risk prevention legal system, such as the debt information disclosure system of local government is imperfect, the debt risk warning mechanism of local government is imperfect, the debt risk accountability system and debt risk emergency mechanisms of local government imperfect. In order to solve these problems, we can legislate the experience from the United States, Japan, Poland, Australia and other countries, Our country should improve the debt risk prevention legal system of local government, including its information disclosure system of local government debt, the debt risk warning system of local government, the debt risk contingency disposal system of local government, the officials of assessment and accountability system, establishing debt repay system and relevant legal system.