The Research On Credit Risk In Local Government Financing Platform Loan In Xinjiang

Recent years，China adopted a series of plans for western area economy and gaveXinjiang Province great economic and political support. Xinjiang government issued a largenumber of the city investment bond for the ground infrastructure construction financing, andthe scale of loan financing platform developed rapidly. Financing platform of localgovern-ment has become the main body of the Xinjiang local government financing to solvethe capital gap. But with the rapid expansion of the size of loan, the credit risk is graduallyexposed. Once the risks losing control, the financing platform can not get effective guaranteeand will lead to Xinjiang local financial crisis.Therefore, the article, based on relevant theories of local government financing platformand its credit risk, discussed the existence of Xinjiang local government financing platform oftheory and the causes of the credit risk and the present situation. Also the paper discussed sixmajor credit risk causes of local government financing platform to be the basis of followingsuggestions.In the fourth chapter, the paper introduces the principle of KMV model and use thetransformation of the model for empirical analysis of the credit risk. Finally get the conclusionthat the loan size should be controlled in a propriate scope, about20percent of the basicconstruction.At last, according to the theoretical analysis and empirical analysis above, the paper putforward some countermeasures to control the credit risk of Xinjiang local governmentfinancing platform loan, respectively from three aspects: local government loans, banks andother financial institutions and Platform Co are risk control suggestions.