Risk Management Research For LS Local Government Financial Platform

The Local Government financing platform is the creature of the social system in China after putting forward the economic construction as the center.Most of the shareholders of such companies are the local SASAC.Due to the increasingly severe financing problem of the local government,this kind of company appears.Since the reform of the tax system in 1994,tax revenues formed by taxes and various kinds of taxes are governed by legislation,management and domination which formed central tax and local tax.Thus the central debt separate from the local debt.In this situation,how to guarantee the source of local government funds and promoting local infrastructure construction has become a primary problem.The Local Government financing platform can solve the financial problem of local government,the irregularities of direct local government financing behaviors are avoided.As time passes,this kind of financing has become the object of the government all over the country to follow.With the continuous development of The Local Government financing platform,the scale of local government debt is also expanding,the internal control of the company is still weak,guarantee provided by local government is not standard;The phenomenon of mutual guarantee between companies exists;Not sufficient registered capital;Some banks and financial institutions are driven by the interests and give companies illegal operations and loans;All of these increase the risks of Local Government financing platforms.How to clearly recognize the related risks of the Local Government financing platforms and come up with effective measures has become problems to be solved urgently.Based on the theory of fiscal decentralization,public goods theory,risk management framework etc,combining case study with theoretical research,the relevant literature at home and abroad is systematically combed.Take the LS local government financing platform company as an example,The risks in three aspects of the company are put forward and generalizing several main types of risk characteristics.Making full use of the combination of quantitative analysis and qualitative analysis,analyzes the policy-local government financing platform companies and financial institutions,the three sides of the relevant risks.lt includes but not limited to internal regulatory risks of platform companies,platform company business process risks,etc.And from the above three angles,we can get corresponding advice and suggestions on risk control.This article combines theory with practice and complemented by the experience of its own project.It is a good and orderly development for China's local government financing platform companies.It also provides reference for transformation and upgrading in the important historical stage and opening up new ideas for future research on the related risks of platform companiesThis article contains six chapters,the first chapter is the generalization,At first,the research background and importance of the financing risk management of The Local Government financing platform are discussed,it also outlines the framework and content,and forms a literature review.The second chapter is an exposition of the related concepts and theories,discussing the relevant theories at home and abroad,it mainly includes the theory of fiscal decentralization,the theory of public products,the theory of information asymmetry,the theory of principal-agent and the theoretical framework of risk management.The third chapter puts forward specific cases which fully describes LS company,including the historical evolution,the development process and the financing risks and causes of its own existence.The fourth chapter combines the background of the previous chapter of LS company,First of all,it summarizes the main types of risk and their characteristics.And analysing its risks.Business process,internal supervision,policy are included.The fifth chapter is the specific measures for the risk management of LS company,The management measures and methods for the risk prevention of LS company are put forward from the aspects of government,platform companies and financial institutions.The sixth chapter is research conclusion and future.