Research Of The Local Government Debt Risk Warning Based On The Disposable Financial Revenue Analysis

The outbreak of the European sovereign debt crisis and the US subprime mortgage crisis hindered the development of the global economy and caused the international community into a panic.Although China has no sovereign debt crisis guaranteed by its name, local governments have borrowed a lot of debtin order to develop the local economy in recent years. Local government debt gradually emerges and local government debt overdue sometimes occurs. As a result, the risk of local government debt is increasing.It is likely to lead to debt crisis and financial crisis of the whole society, even the social crisis, if we do not take steps timely and effectively to guard against and resolve the local government debt risk. How to prevent and resolve local government debt risk has become a top priority and how to provide theoretical basis to establish a scientific and effective local government debt risk warning system forgovernments to formulate appropriate policies to solve the debt risk problem becomes a hot research topic.Firstly, this paper describes the purpose and significance of the research of the local government debt risk and its warning system.Secondly,it introduces the local government debt and debt risk theories. Thirdly,it defines the local government debt default riskand builds local government debt default model to simulate calculation and analyze. Fourthly, it analyzes the factors of local government debt default which affect the size of the default probability and builds a local government debt risk warning modelbased on the analysis of disposable revenue. Then, it is the empirical analysis through the local government debt risk warning model empirical analysis.After search the data on the debt balance and the main economic indicators of Hebei Province.It analyzes the Hebei Province by the local government debt risk warning model based on the debt balance statistics data and the main economic indicators.It calculates every and comprehensive risk factor by the index weight which is calculated by the risk mapping method combined Financial particle theory and Target decomposition method.Then itobtains the "two warning zones" called "light Police District" of Hebei Province debt risk in 2014 to adjust and improve the debt situation of Hebei province.The last part of this paper provides relative recommendationsfrom different warning levels and local government debt management policies directed by the local government debt risk now.