Risk Analysis Of Commercial Bank Loans To Local Government Financing Platform

Credit loans are the main business in the commercial bank. Along with theeconomic development, the business of credit loans have developed rapidly in recentyears, especially after the financial crisis in2008. China’s local government financingplatform makes great contribution to speeding up the pace of infrastructureconstruction, and strengthening the government’s ability to take advantage of localresources.Data from the CBRC (China Banking Regulatory Commission) in January thisyear, local government financing platform loans has been up to9.2trillion, accountingfor13.8%of the outstanding loans of the banking sector.35%of the platform loanscoming due in2012-2014three years, the local government platform is still in thepeak of the debt service. Being the absolute main sources of risk, the platform debt isclose to70%of the total number of local debt. Bank loans account for79.01percentof the total local debt, so that the fiscal risk deepens the possibility of higher financialrisk. By analyzing influence factors of the loans risk based on the nation, localgovernment and enterprise aspects, this paper establishes risk index system. Then itchooses the multi-step fuzzy comprehensive evaluation method and the AHP(Analytic Hierarchy Process) to build the risk measurement model and makesapplication analysis of the model.The purpose of this study is to analyze problems in China’s commercial banks forgovernment financing platform loans. Combined with the development of the basicrequirements and risk management of commercial banks, it puts forward suggestionsand considerations to deal with risks, to elicit the attention of the government andsociety, and together for commercial banks to generate a favorable internal andexternal environment. The research has a strong theoretical and practical significance.