Research On Credit Risk Of City Investment Bonds Based On The Perspective Of Government Implicit Guarantee

Starting in the 1990 s,the tax-sharing reform and urbanization led to a gradual increase in the fiscal deficit rate of local governments in China.The city investme nt bonds appeared on the historical stage in a timely manner,solved the problem o f insufficient funds for local municipal construction,and helped the local economic development in China.However,the multiple expansion of the city investment bonds eventually brought several default risk events.This not only exposed the defects o f the city investment company's own credit qualification,but also triggered the thin king of the academic and policy sides on the government's implicit guarantee behin d the city investment bonds.Although Circular 43 of the State Council in 2014 dive sts the government financing function of the local financing platform,and the 50 th document jointly issued by the six ministries and commissions in 2017 emphasizes the clearing of breach of contract guarantees by local governments,the government's implicit guarantee behind the city investment bonds will still significantly affect th e city investment bond market in the short term,considering that the actual controlle r of the local financing platform in China is still the local government.Therefore,thi s paper chooses the perspective of the government's implicit guarantee to study the credit risk of the city investment bonds.This paper firstly analyzes the characteristics of city investment bonds on the b asis of the stock market debt data under the wind caliber.The empirical model esta blished then verified that the government's implicit guarantee has a significant imp act on the credit risk of city investment bonds,the stronger the local fiscal revenue strength,the higher the government's implicit guarantee willingness and ability,and the lower the credit risk of city investment bonds.After the qualitative analysis,thi s paper reconstructs the traditional KMV model,replaces the future market value ofassets with the future fiscal revenue that can be used by local governments to pro vide implicit guarantees for urban investment bonds,and establishes a credit risk m easurement model that meets the perspective of this paper.Then this paper selects Ji angsu Province,with the largest scale of city investment bond issuance,to analyze t he credit risk of them.The results show that the scale of city investment debt repay able of Jiangsu province for the next three years is within the margin of safety an d the overall risk is controllable.However,the actual scale of city investment debt to be repaid to the proportion of the guaranteed financial revenue has approached t he cordon——80%.In order to control the credit risk of city investment bonds and prevent local debt crisis,this paper finally proposes countermeasures and suggestion s from the three levels of local governments,local financing platforms,and third-pa rty intermediary agencies.