Research On The Moderate Scale Of Local Government Debt Based On The Perspective Of Credit Risk

Over the past decade,the scale of China's local government debt has three characteristics: the growth trend of increasing year by year;the huge debt;the potential risk of huge debt.At the same time,a series of problems have emerged in the debts management system of local government,such as part of local government investment platform for the use of government debt funds illegal,local officials lack the ability to identify potential debt risk,blindly a lot of debt.The debts management system of local government has been far from being able to adapt to the rapid growth of debt.At present,most of our country mainly through the "borrowing and refunding" way to repay the government debt,and the result is that the increased financial pressure of the local government,the increased financial risk.According to the result of audit to the government debt,local government debt funds are the boosters of local economic development,which can promote the improvement of economic level and guarantee the supply of local public services.That does not mean that the local government debt as much as possible,once the debt exceeds the ceiling,financial risks will occur.Therefore,the local government should not borrow a large amount of debts for the growth of GDP blindly.They should maintain the appropriate amount of the debt to avoid debt risk.According to the results of the audit released by the Jiangxi Provincial Department of Finance on January 25,2014,as of the end of June 2013,the government debt balance in Jiangxi Province was close to 400 billion yuan,and the government debt scale also showed similar characteristics.For the first time in 2014,the Ministry of Finance approved the issuance of local bonds in Jiangxi Province.In 2017,the government debt of Jiangxi Province was unified by the provincial government.The study of the appropriate scale of local government debt in Jiangxi Province has important theoretical and practical significance under that background.In the early period of the study of local debt,the Chinese scholars mainly studied the debt by means of qualitative analysis.Although there are many scholars in our country adopting empirical analysis,most scholars lack systematic and in-depth research.Based on the credit risk perspective,from the general to the specific,the paper makes a systematic and in-depth study on the scale of debt of 11 cities in Jiangxi Province by means of KMV model,in order to providing quantitative indicators for Jiangxi Province's security financing.First of all,this paper states the concept and theory of this research,and on this basis,discusses the classification and development of local government debt.Secondly,it analyzes the current situation of local government debt and the problems in debt management according to the results of the audit finance and some of the relevant public information in 2014.And the KMV model in the credit risk model is used to calculate the feasibility of the local debt scale of 11 cities in Jiangxi Province from 2017 to 2019,in order to determine the appropriate scale of local debt in different cities.Jiangxi provincial government can rationalize the financing according to the appropriate indicator,to prevent debt risk.Finally,based on the previous analysis and the actual situation of the local government debt management in Jiangxi Province,some policy suggestions on how to prevent and control the debt risk as well as solving the debt problem are put forward from the aspects of the local debt control and the local debt management system.