The Mechanism And Empirical Research Of The Impact Of Local Government Implicit Guarantee On The Credit Risk Of Quasi-Municipal Bond

Since the reform and opening up,China has experienced unprecedented rapid growth for more than 40 years.In this process,local governments have played a vital role in China's economic construction and have become the backbone of the rapid economic growth.It is undeniable that China is at the peak of accelerating urbanization and infrastructure construction,but behind the rapid development of the economy,it has also brought many problems.After 1994,China's tax-sharing reform clearly divided the financial and administrative rights of governments at all levels.Although the reform of the tax-sharing system promoted the development of local economy,under the framework of the old Budget Law,local governments did not have the right of direct borrowing.They can only get central government financial subsidies or transfer payments instead.The financial gap accumulated for many years cannot support the huge financing needs necessary for further development.Quasi-municipal Bond have emerged as a result.With the rapid expansion of the financing scale of the city investment and financing platform,the irregular operation has occurred frequently,and the local government's illegal guarantees have led to the increasing risk of debt repayment of the city investment and financing platform.The local financing platform is"double-edged".The characteristics of the sword have gradually emerged.In order to resolve the long-term credit risk of local government debt and focus on preventing the resolution of major financial risks,the central government revised the"Budget Law",and successively issued relevant documents to promote the stock debt orderly.After the promulgation of"No.43 Document",the debt of the city investment financing platform is no longer guaranteed by the explicit local government,and should present a wider credit spread at greater credit risk.However,in the actual Quasi-municipal Bond financing,investors are still more focused on the consideration of the local government level,but do not pay much attention to the financing platform's own qualifications,there is still a"belief' problem in the Quasi-municipal Bonds.The investment market of Quasi-municipal Bonds and the central government's policy is contradictory,and the problem of local government guarantee mechanism from explicit to implicit is increasingly prominent.This paper analyzes the history of the city investment debt,and explores the deep-rooted causes of the risk accumulation of the Quasi-municipal Bonds,trying to use the theoretical analysis to find out the credit risk of Quasi-municipal Bonds and conducts empirical tests.The results show that the stronger the local government's economic strength,the stronger the willingness to guarantee the financing platform,and the stronger the guarantee strength,the smaller the credit risk of the city investment bond.The article recommended that the government should strengthen the risk management of local government debt,broaden the investment and financing channels,and promote the investment and financing platform of the city.Internal transformation and promotion of local government debt stock screening and replacement work,focus on preventing the resolution of maj or risks,maintaining high-quality economic development.