Research On Local Government Debt Based On KMV Model

The economic impact of government debt is an ancient topic that all nations are studying.As early as 200 years ago,David Hume,a famous classical economist in the UK,once said:"The imminent disaster can be guessed without knowing the prophets.Both must live one:not because the country ruined public credit,that is,public credit ruined the country."Governments in the world today are facing the mounting threat of increasing government debt.How to prevent and resolve the local government debt risks and keep the financial stability and sustainable development has been widely concerned by all countries in the world.Affected by the international financial crisis,since 2009,in order to stimulate domestic economic growth,our country has formulated a new proactive fiscal policy.The formulation of this policy has led to a substantial increase in the size of our government debt.Affected by the fiscal policy,our country's debt risk and debt situation have received sufficient international attention.By analyzing the causes,effects and risk performance of local government debts,this paper analyzes the current situation of local government debts in our country,and obtains the enlightenment by studying the international experience of dealing with government debts in the United States,Japan and Russia.Enumerate a large number of official data of the study of the supporting point,through the relevant comments on the government debt risk prevention measures and related risk implications to put forward the corresponding feasibility advice.This article elaborates the definition,characteristics,classification,influence and status of government debts,which draws attention to the problem of government debt risk.This article analyzes the problems of local government debts from advantages,disadvantages,opportunities and threats by using SWOT analysis In four aspects,the detailed and systematic analysis of internal strengths,weaknesses and external opportunities and threats,according to the actual situation in accordance with the idea of systematic analysis,the various factors match each other matrix arranged according to be analyzed.Then we choose the relevant financial data of Henan province from 2004 to 2015,and use the KMV model to measure the default probability of the government debt risk.By comparing with the 4%warning value of the international default probability,we can draw the conclusion that the current government debt of Henan Province is Conclusions in the context of safety.By comparing the above two kinds of analysis methods,it is concluded that the conclusion obtained by KMV model analysis is more objective,scientific and of higher reference value,which is more suitable for forecasting and preventing government debt risk.Finally,according to the above two analysis methods,it is proposed to strengthen the monitoring of the government debt risk,and to the government debt warning and prevention suggestions.