The Research On Quasi-municipal Bond Credit Risk And Prevention Countermeasures

Quasi-municipal Bond is a kind of alternative financing method existing under today’s specific economic situation of China to avoid the limitation of the budget law.It is also featured as a financial innovation. As an analogue of Municipal Bond in Chinese characteristics, Quasi-municipal Bond dissolves the problems of municipal’s lack of capital. However, as the special financing at this moment, Quasi-municipal Bond develops in high speed with more and more problems. If the Quasi-municipal Bond continues high-speed growth, it may cause credit risk. A series of relevant documents have been made to manage Quasi-municipal Bond in 2014. It also changes the trace of Quasi-municipal Bond. Further research into Quasi-municipal Bond has a important significance for ruling its proper development and achieving its steady transition, deepening the reform of municipal financing mechanism, speeding the construction of city and realizing the harmonious and stable economic growth.This paper introduces the cause, factors and harm of Quasi-municipal Bond credit risk and make some recommendations to let Quasi-municipal Bond go through the difficult period. This paper takes Hunan Province as an example to establish KMV model to analysis the credit risk of Quasi-municipal Bond. The empirical result shows that the credit risk of Hunan Quasi-municipal Bond is low. Although the high-speed development of Quasi-municipal Bond produces many problems and exists potential credit risk, the emergence of Quasi-municipal Bond provides much money for the construction of infrastructure and promotes the economic development. To prevent the credit risk affected by related documents published in 2014, this paper puts forward with significance suggestions. First, strengthen the constuction of Quasi-municipal Bond and municipal Bond. Second, the identifiable principle of local government debt should be definite and some departments should do research on new financing mode actively to find suitable substitute for Quasi-municipal Bond. Third, the local investment and financing platform should take the initiative to change themselves.Fourth, strengthening the construction of local government investment and financing management.