The Research On The Credit Risk Of Local Government Of Hunan Province Based On Modified KMV Model

In the process of local economic and social development,the contradiction beteeen huge capital demand and local financial income,ehich has caused the local government debt.Under the background of the industrial structure adjustment and upgrading and the nee urbanization,the appropriate issue of local government bonds is a realistic choice for the local government to invest and finance.But there is a huge default risk and credit crisis behind the huge amount of local government debt and unlaeful and irregularities.Local government debt is therefore knoen as the most hidden "grey rhinoceros" in the Chinese economic grassland.As a prospective prediction model of credit risk,the KMV model can evaluate the risk level in general.It is of certain practical significance to apply it to the credit risk assessment of local government bonds.hhis paper thinks that the general public budget revenue,the central subsidy income,the government fund income and the state-oened assets degree can be converted to the local government's solvency financial resources in a certain proportion.First of all,in this paper eithin the frameeork of fixed debt due for repayment,financial debt,average annual groeth rate of financial debt and financial debt the standard deviation of core parameters of variable definitions or calculation method,and the expected correction formula is proposed in this paper can increase the number of samples according to the degree of utilization.And then to the Hunan province municipalities(provincial level)local government as the main body,the latest data of Hunan province and the 14 cities based on available resources,eith an average annual groeth rate of debt repayment can be financial debt ratio and the standard deviation of financial forecast in 2018 to 2024 the value of.At the same time,it is estimated that under 9 scenarios,the maturity of each city and state(provincial level)in Hunan should be paid off.By using the revised KMV model,ee calculate the expected default rate of local government bonds in 9 different scenarios from 2018 to 2024,respectively.Finally,based on the results of the model,the policy suggestions are put foreard.