Study On Corporate Governance Effects Of Banks Participate In Local Government Investing And Financing Platform Under The Condition Of Government Guarantee

In recent years, Local Government Investing and Financing Platforms haveeffectively solved the Local Government financial problems and local construction fundshortage. To some extent, Local Government Investing and Financing Platforms havealso made the business investment and the whole market more active. And moreimportantly, they play a big role in economic growth sustaining, domestic demandexpanding, structural adjustment, people’s livelihood promotion and downwardeconomic trend reversing. But there are some problems we should pay great attention，such as the debt financing scale companies is expanded rapidly，the structure of LocalGovernment Investing and Financing Platforms are not very standardized, and the riskof bank loans is increasing and so on．Therefore，this article tries to study the LocalGovernment Investing and Financing Platform systematically for its governmentguarantee influence mechanism and financing behavior. This has very importanttheoretical and practical importance in order to reduce the risk of bank debt,protectfinancial market and Local Government Investing and Financing Platform and makethem grow as healthier, steadier and longer as possible.The main research results of this thesis is displayed as bellow：Firstly，by using descriptive statistics method，we summaries the present situationof Local Government Investing and Financing Platform development，including the itsevolution process，investment projects，money performances and so on．The resultsshow that bank debt is the main fund raising channel for Local Government Investingand Financing Platform, and the management of these platforms in past two years hasbeen improved, so does the bank strengthen restrictions.Secondly, on the basis of previous combining research of Local GovernmentInvesting and Financing Platform, under the condition of government guarantee, we setup an appropriate mathematical model to study the influence of corporate governancemechanism of Local Government Investing and Financing Platform. The results showthat the bank supervision strength and the effort level of Local Government Investingand Financing Platform are positively related with the amount of bank loans,and arenegatively related with the government guarantee rate. Due to the high level ofgovernment guarantee rate, the bank supervision strength and the effort level of LocalGovernment Investing and Financing Platform are at a relatively lower level these days. Thirdly, on the basis of previous research results above，we get a further empiricalresearch.The results show that:the effect of bank loans to Local Government Investingand Financing Platform’s corporate governance is not obvious; Long-term bank loansdo have some effect on agent cost and the corresponding bank loan supervision strengthdid not increase even though the number of bank loans has been increased in recentyears．This situation is related with our bank risk prevention system and the projects andoperating conditions of Local Government Investing and Financing Platform. And also,these policies and measured need more time to be implied.Finally, based on the research results mentioned above，this thesis propose severalpolicy suggestions in order to improve the developing mode of Local GovernmentInvesting and Financing Platform under government guarantee.