Local Government Debt In Our Country The Risk Prevention Analysis

The significance of local government bond issuance is to alleviate local government financial constraints,or for the construction of local public facilities or large-scale projects such as transportation,communications,housing,education,hospitals and sewage treatment systems.In general,local government bonds are guaranteed to be government tax capacity or project revenue.Local government bonds,known as "silver-edged bonds," are slightly more risky than central government "gold-edged bonds".This shows that the default probability of local government bonds is higher,which has been common in western developed countries.Just as corporate bonds may default,so are government bonds.Because of the short time and lack of risk management experience,local governments in China are faced with many management and supervision problems.Therefore,local governments need to effectively identify the risks of bonds and take measures to actively control the risks.Therefore,on the basis of studying the risk theory of local government bonds in China and combining with the current situation of local government bonds in China,this paper analyzes the potential risks of issuing local government bonds in China,and points out that the main types of risks are market risks,use risks,credit risks,financial risks and operational risks,using the new version of COSO in 2013.This paper uses the improved KMV model to evaluate the risk of local government bonds in Fujian Province.At the same time,it calculates the issuance scale control line.Finally,combined with the experience of developed countries and China's actual situation,this paper uses this Internal Control——Internal Framework to build a complete risk prevention system.