The Study On Credit Risk Of The City Investment Bond

The city investment bond can be understood as Chinese-style municipal bond. Inrecent years, as the pace of expansion of China’s bond market significantly accelerateand the rapid development of city investment bond market, the worries about thecredit risk of city investment bond is gradually increased. This can be explained bythe following five reasons:1.The scale of local government debt is rapidly expandingand the debt risk is accumulated seriously;2.The level of the local investment andfinancing platform is getting lower and lower;3.Relaxing regulation leading to thelevel of disclosed information and the transparency of disclosure sharply declined;4.Because the issue of approval is loosen, the city investment bond’s ways toincreasing credit appeared variety of innovation, but it’s hard to say whether thissituation is comply with legal;5.The municipal bond character of city investmentbond makes it hard to distinguish between corporate bond and local government bond,and the credit risk is hard to confirm too.Consequently, this article focused on the credit risk of city investment bond. Onthe base of the city investment bond’s municipal bond character and its developmentstatus, through the carding and analysis of the city investment bond’s credit risk—including through the case analysis of the credit risk and through the empiricalanalysis of the sources of risk, enhance the awareness of city investment bond creditrisk, to provide reference for development of the market.The first chapter of this article explains the research background, clarifies theresearch significance, combing research ideas and methods; Chapter2sorts theexisting literature research; Chapter3firstly defines the meaning of the cityinvestment bonds, analysis its unique character, then back to the city investmentbond’s the background and the course of development, lastly, deeply analysis theoperating mechanism and character of the current city investment bond market.;Chapter4firstly classified the city investment bond’s credit risk and on the basis of this classification, desperately analysis the city investment bond’s risk influencingfactors, mainly through the following three categories: business, local governmentsupport and enhancement of compliance; Chapter5analysis the city investmentbond’s credit risk cases, through "Yuntou debt storm" case’s narrative and analysis,enhance the intuitive cognition to the city investment bond’s credit risk. Chapter6isthe empirical test of the city investment bond’s risk influencing factors. Based on theset of regression model, clarify the city investment bond’s risk influencing factors byquantitative analysis approach；Chapter7is the conclusion and prospect of research,based on the above analysis with the main conclusions of this thesis, and then putforward the policy recommendations.