Loans Risk Study Of Local Government Financing Platform

Since the tax system reform was implemented in China in the1994, the local government has taken more transactions and insufficient financial resources. At the same time, along with our country city changes a process to accelerate, local government need a lot of city infrastructure funds to rise. But due to lack of fiscal revenue, most local governments cannot afford such a huge amount of capital expenditure. In order to solve this situation a serious lack of funds, local government financing platform will emerge as the times require. Along with the international financial crisis in2008, China promulgated4trillion of investment plans, local government financing platform come into being in large numbers. These financing platform with a government guarantee, borrows from banks, whose indebted rate is high. By the end of2012, the local government financing platform obtained from China banking credit funds amounted to9.2trillion yuan, and the loans accounted for the entire bank loans13.8%. Sustainable management of rapid increase in loans to commercial banks has brought about tremendous business risk, but also let local governments bear the huge debt pressure, the adverse impact on the sustainable and healthy development of commercial banks and local government.As China’s financing in the fields of innovation mechanism, local government financing platform not only can resolve the face of local government finance on the problem of capital shortage effectively, but also can provide strong financial support for the city infrastructure construction. But this mechanism is also accompanied by huge financial risk, financial risk, and this risk to the local government and the banking industry has brought great risk. The local government financing platform risk has been widespread concern in society, faced with such a background, this paper takes the local government financing platform credit risk as the main research context, were analyzed through to the domestic and foreign related operation mode and the local government financing platform development, and a branch of a state-owned banks is studied with the current current situation, the local government financing platform loan risk and risk factors, and select the X financing Platform Co as a case, to analyze and evaluate the credit risk and the operation status, respectively from three aspects of the financing platform, financial institutions and government on the X financing Platform Co how to prevent the credit risks faced by the proposed specific measures.Based on the analysis of local government financing platform, and then make a comprehensive judgment on the existing credit risk, so as to prevent and dissolve the local government financing platform possible credit risks, actively play the financing platform in raising funds, positive role in promoting economic development, so as to guarantee financing platform can effectively and continuously persist. So, based on the analysis of local government financing platform for promoting China’s sustainable economic development is of practical and theoretical significance.