The Study On The Introducing Margin System In Auction Issuance Of Local Government Bond

The local government bond has become the most important fundraising channels since the “The Budget Act” amendment allowed the local government to raise money publicly from August 31,2014.By the end of Oct,2016,both the size of the issuance amount and mark et value of local government bond surpassed 10 trillion RMB,which is the second largest bond category in Chinese market,just followed after the treasury market.At present,the issuance by auction is the main way to issue local government bonds,which need to pay the winning part of the investors rely on their own credit to local government contributions to obtain the appropriate bond right.In this link,the investor's credit for the success of the bond issue is essential,if some investors default payments do not pay the situation,the right of the entire local government bonds and placement will have a great risk.Under the circumstance that the credit construction system is not perfect and the moral hazard of breach of contract exists objectively,the current bidding system needs to be perfected in order to reduce the exposure of local government issuers.Otherwise,the issuance risk of local government bonds will lead to the local government debt replacement process is affected,and may further increase the risk of local government debt.In view of this potential risk,this paper puts forward the idea of introducing the deposit system into the local government bond bidding and issuing process,with a view to perfecting the system to reduce the potential risks.Around this idea,this article has carried on the related theory combing and the overseas experience system summary,from the necessity,the feasibility aspect carries on the demonstration,thought that the local government bond tendering introduces the deposit system is one kind prevents the potential default risk effective system.Although this system has the potential risk of raising the cost of local government financing,it can be further hedged by perfecting the system and realizing the secondary balance between the local government bond issuer and the potential investor.The prospective application of the deposit system in the issuance of local government bonds can evade a potential risk point for large-scale issuance of local government bonds in the coming years.At the same time,this system can also be applied in China's bond market promotion,to reduce the systemic risk of the bond market.In addition,it is a highlight of this article that the system can be drawn from the system of stock deposit,auction deposit and futures trading margin system,and designed a perfect bond system which can be applied in the process of issuing local government bond.This paper is divided into eight chapters.First of all,from the background of the defaul t of the credit payment default,the scheme of introducing the deposit system is put forward.On the basis of combing the basic concepts and theories,the paper introduces the foreign institutional arrangements for this risk,And analyzes the reasons why the foreign institutional arrangements can not be applied in our country according to the situation of our country.Then,the paper demonstrates the necessity and feasibility of the deposit system.Finally,according to the relevant theory and market practice,this paper designs the local government bonds adapting to our national conditions The Scheme and Implementing Steps of Introducing Margin System in Bidding Issuance.After the conditions are ripe,the deposit system can eventually exit after the credit records system mature in China.there is no similar situation to the design of the program in the market,there may be corresponding deficiencies,I will deepen the combination of theory and market practice to improve the feasibility of the design program in the next steps.