The Research On The Risk Management Of Local Government Financing In Commercial Banks

Throughout the history,we will find that local government debt crisis often induces the emergence and intensification of bank risks,even leads to the bankruptcy and collapse of the banks,forms debt crisis and bank risk interweave compound financial crisis,poses a great threat to international financial stability.The subprime crisis originated in the United States in2008 quickly evolved into a global financial crisis in a short time,the impact is large enough to affect developing countries,including China.To cope with the negative impact of the financial crisis,such as currency devaluation and shrinking employment,the China government has proposed an economic stimulus policy with a total size of nearly 4,000 billion Yuan.Since then,local governments have begun to invest heavily in infrastructure construction in line with the central economic policies.The local government debt soared from 107,100 billion Yuan at the end of 2010 to 178,900 billion Yuan at the end of June 2013,an increase of 67.04 percent in three years.However,the ministry of finance and other six departments jointly issued the "notice on further regulating local government borrowing and financing behavior" and the "notice on resolutely stopping local governments from illegal financing in the name of purchasing services”.The local government financing really causes the local government,the commercial bank's high attention and the panic,the source is the irrational business expansion and the scientific risk management vacancy.A Bank is a provincial branch of a large state-owned commercial bank in China,with 12 municipal branches and over 13,000 employees.As of June 2018,local government financing accounts for 37.05% of the total corporate credit business of A Bank,and has become an important source of revenue after 2009.As of June 2018,local government financing accounts for 37.05% of the total corporate credit business of A Bank,and has become an important source of revenue after 2009.At the same time,the proportion of loans related to local government financing business also reached 5.2%,and the risk exposure is gradually increasing Therefore,it is urgent toobjectively and comprehensively analyze the current situation of local government financing and problems in risk management faced by commercial Banks in China.In this article,through the combination of theory and practice and other research methods,begin with the condition of the local government financing from A Bank and the current situation of risk management practice of combining modern commercial bank risk management theory,the analysis of A Bank in the risk management in the local government financing business problems and deficiencies,then puts forward countermeasures and suggestions.The first chapter is the introduction,to introduce the research background,the purpose and significance of the research,the research status and development trend of scholars at home and abroad,the research contents and methods,and the innovation points of this paper.The second chapter expounds the current situation and existing problems of local government financing business faced by commercial Banks.The third chapter is about the risk management of local government financing in A Bank based on the credit risk management theory.Find out the problems in risk management of A Bank through analyzes of its risk management measures.The fourth chapter is about analyzes the reasons for the risk management of local government financing business of A Bank.The fifth chapter is about Suggestions and countermeasures on risk management of local government financing business of A Bank.