A Case Analysis Of Fangxing Xx Trust Product Default

The “Circular 43” issued in 2014 and the new “Regulations on Asset Management” formally implemented in 2015 have made the market aware of the determination of the regulatory level to rectify the debt problems of the government and local government financing platform.The Ministry of Finance has stated many times that after the implementation of the new “Regulations on Asset Management” in 2015,the debt raised by financing platform is not a local government debt.However,since 2015,when financing platform financed through trust,there are still local government illegal guarantees.The “Governance New Regulations” was introduced,and the asset management product defaults of local government financing platform increased.In the case of trust defaults involving financing platform that occurred at the end of June 2018-2019,there were 8 local government violation guarantees.The article's research on the default of the trust products of the urban investment company has a certain significance for exploring the debt risk factors of the urban investment company and reducing the occurrence of defaults in the future.The article focuses on the first case of S Province's first urban investment trust product default case.Even with the economic and financial support of the top 100 counties in the country,H Urban Investment still experienced a default of the trust product.The paper analyzes the cases layer by layer in order to find out the reasons.The thesis first introduces the background and default of the case after clarifying the issues such as the generation of urban investment company and its debt expansion.After analyzing the case,through a detailed analysis of the financial situation of H city Investment,it was found that the company's financial situation was poor,there were problems such as weak actual short-term debt solvency,poor asset realization,unsatisfactory profit structure,insufficient liquidity,etc.The complaint also directly affected the principal and interest repayment of the trust product in this case.Then,the article also found that the policy tightening is also an important promoter of the default of the financial compression of H City Investment.The company's "borrowing the new to the old" model is very sensitive to the tightening of the policy,and the illegal operation of the C city government and the State Communications Trust also caused Important reason for breach of contract.Finally,as far as the impact of the incident is concerned,although the H city Investment Trust has a certain adverse effect on its own financing after default,it is a step forward for the trust industry to break rigid payments.The article found that China's financial system reform still needs to be improved after analyzing the default case of the "Fangxing No.XX" product.This is the source of the urban investment debt problem.At the same time,the local government needs to be more standardized and strengthen the risk awareness of financial institutions.Only in this way can we effectively prevent the debt risk of local government financing platform.The article also provides corresponding insights into financing platform's own financial improvement and affirms the active role of local government financing platform in social development and construction.Finally,the article discusses the standardized operation of financial institutions and the transformation direction of urban investment companies.The case selected in the thesis is relatively novel,and it has a certain reference value for analyzing the urban investment debt default and its future development direction,and provides some powerful supplements to the relevant research of the urban investment trust perspective.