Research On Credit Risk Management Of Local Government Bonds

Based on the background of the global financial crisis of 2008 and at 2009 China began to pilot to issue local government bonds by the Ministry of Finance on behalf of.12 th Five-Year China outline proposed to explore the establishment of local government bonds issued by the system at 2011, Shanghai, Guangdong, Zhejiang and Shenzhen began to pilot the issuance of local government bonds. In 2014, Beijing, Qingdao, Ningxia,Jiangxi pilot spontaneously from municipal bonds. Local government debt scale expands rapidly, by the end of 2015 local government bond issuance has reached 3.8255 trillion yuan.After the reform of the tax system in 1994, the gap of local government revenue and expenditure continues to expand. "National new urbanization plan(2014-2020)" issued to further promote China's urbanization process, the local government is facing more and more financial difficulties. Local government bonds, also known as bank bonds, the degree of credit is very high, second only to Treasury bonds. But the risk of local government bonds, especially credit risk can not be ignored. The United States has had a number of municipal bonds default event. China's current economy is being into the new normal, the continued growth of fiscal revenue support factors have gradually weakened,the total amount of debt has been rising, and the early accumulation of debt due to the local government is facing enormous pressure to repay the debt. The new "budget law" allow local government to debt, local government bonds will be more big in the future,the research and prevention of local government credit risk has important significance.Based on the analysis of domestic and foreign local government bonds and credit risk related theories, the theory of public goods theory, fiscal decentralization theory,western public debt theory and budget soft binding theory are the theoretical basis,Through the introduction of the current situation of China's local government bonds and analysis of the actual needs of local government bonds, the comparative analysis of the United States, Japan and Brazil, the local government bond credit risk management experience, At the same time, by comparing and analyzing the modern credit risk measurement model, the KMV model is applied to the local government bonds, taking Qingdao city as an example to analyze the credit risk of local government bonds by using adjusted KMV model, First use ARIMA model to the Qingdao municipal revenue forecast,and calculated guarantee financial revenue measure certain bonds scale of local government bond default distance and default probability, local government bonds ofsafety debt scale prediction, And the main conclusion is that the credit risk of local government bonds increases with the expansion of the scale of issuing bonds, local governments must reasonably control the size of the bonds. At last, the countermeasures and suggestions on the credit risk management of local government bonds in our country are put forward.