Research On Risk Assessment And Prevention Of City Investment Bond

In order to cope with the international financial crisis, the Chinese government introduced a4trillioneconomic stimulus plan in2008, took a proactive fiscal policy and loose monetary policy. The rapidexpansion of the city investment company resulted in the expansion of the city investment bond. At present,China is still in the exploration stage in developing the city investment bond. The huge debt may causepotential risks. Once the debt default occurs, our country will be faced with serious financial and economiccrisis. With the arrival of the payment of the debt peak, strengthen the risk prevention study become theurgent priority of the development of the city investment bond.This paper mainly focuses on risk analysis and risk prevention measures of the city investment bond.First, we addressed the basic theory about the city investment bond, and made comparison between the cityinvestment bond and the municipal bond. Then, the background and development process were discussed.We analyzed the development of the city investment bond with the data from2007to2013. After that, thearticle made discussion of the main factor that affect the bond risk, including the macroeconomic situation,real estate, financial and support from the local government. Then, this article analyzed normatively aboutthe operational risk, the policy risk and the legal risk. Combined with the representative data of the cityinvestment bond, we made empirical analysis on the market risk and credit risk. Finally, when learningabout the risk prevention measures from western countries, this article raised the risk prevention strategiesaccording to the actual situation of the city investment bond in China.In this paper, qualitative analysis and quantitative analysis, normative and empirical analysis are usedto do research. We concluded that the city investment bond has some risks, but the risk is controllable. Theregulation authorities should make standard guidance to improve the development of the city investmentbond, which can serve the construction of the economic reform better.