Research On Credit Risk Of Jilin Provincial Government Bonds

The promulgation of the new “Budget Law” in 2015 gave local governments the right to independently raise debt financing.Local governments can issue bonds within the prescribed limits,which can effectively solve the problem of insufficient financial resources.The implementation of the new "Budget Law" is of vital importance to promoting economic development,fiscal level stability,and provision of public goods in various regions of China,and is also of great significance for realizing the sound development of local government bonds.With the normalization and standardization of local government bond issuance,the issue of credit risk of local government bonds has become the focus of academic and practical circles.This paper firstly combs the relevant domestic and foreign literatures,discusses the concept,classification and existing risks of local government bonds,and systematically expounds the related theories of public goods and fiscal decentralization.The research laid a solid theoretical foundation.Secondly,it analyzes the basic situation of the issuance of bonds by the Jilin Provincial Government and identifies its credit risk.It finds that the credit risk of the Jilin Provincial Government bonds mainly comes from the issuance and repayment of bonds.Next,based on the comparative analysis of the existing credit risk measurement models,the KMV model was selected and constructed to measure the risk of the general government bonds and special bonds of Jilin Province.According to the risk measure,the following conclusions are drawn: The actual debt issuance of the general government bonds of Jilin Province is lower than the predicted safe bond issuance,and the overall risk is controllable.However,considering that the Jilin Province government bonds will enter the peak of debt repayment in the future,the future risks cannot be ignored;Relatively speaking,the actual bond issuance of the special bonds of the Jilin Provincial Government is lower than the predicted safe bond issuance,and the income bonds such as land reserve bonds and toll road bonds have certain project income guarantees,so the credit risk is relatively small.Finally,based on the quantitative and quantitative analysis of the Jilin Provincial Government bonds and the credit risk measurement,the corresponding countermeasures and suggestions are proposed from the provincial government level and the national level respectively: for the Jilin Provincial Government,it is recommended to improve from the effective control of the scale of bond issuance,reasonable planning of bond issuance,adjustment of bond issuance ratio,and reasonable setting of issuance interest rate,Strengthening the financial resources construction of the Jilin Provincial Government;for the central government,it proposes four proposals to strengthen the management of local government bond issuance,improve thecredit rating system for local government bonds,standardize the information disclosure system for local government bonds,and establish a professional bond insurance system.