Issue Pattern And Risk Control Of Local Treasury Bonds In China

Under the influence of the global financial crisis, China issued 200 billion yuan local treasury bonds in 2009. This article systematically studies the issue pattern and risk control problem of local treasury bonds after issuing.This paper summarizes the issuance theory and practice of local government bond, then analyzes the fiscal and taxation system background and characteristics of the existing issue patterns. Public goods theory and fiscal decentralization theory suggests that the central government should give local authorities fiscal powers corresponding to responsibility. The local government issuing bonds can absorb social idle capital, provide the district public goods, speed up economic construction. Because our local government bond issuance is in the initial stage, and is different in state system, laws and regulations from other countries, we can't simply overlaying certain issue pattern.After comparing the characteristics of the fiscal and taxation system present in China, combining with the present situation and problems of first issuance, using issuance experience of treasury bonds, the central bank bills and quasi municipal bonds for reference, following the principles of perspectiveness, scientificity and operability, this paper constructs a new issue pattern and discusses the supporting measures for using new pattern.Finally, this article classifies issuance risk characteristics of Chinese local treasury bonds according to whether be quantifiable or not. Risks which can not be quantifiable could be controlled by using risk management experiences in foreign countries, when risks which can be quantifiable could be controlled by using common model.