The Research On Loan Risk And Prevention Of Commercial Banks Based On Local Government Financing Platforms

Local government financing platforms plays an important role in many aspects,such as maintaining economic growth,expanding domestic demand,promoting economic stability,alleviating public investment shortage,improving the infrastructure conditions,and promoting urban construction.However,there are some problems in the operation of local government financial platforms,the main problems are as follows:one problem is the huge loan amount of local government financing platforms borrowing from commercial banks,and the second problem is the financing structure and the investment direction are not reasonable.Furthermore,for the rapid development of the financing platform,many negative effects are appeared.The large loan amount,long loan maturities and relatively concentrated repayment schedule are the main factors to increase the government's debt pressure.Local fiscal and financial risks may be triggered if it is not handled properly.Currently,the clean-up and regulation work aiming at loans that financing platforms borrowed from commercial banks loans is underway in an orderly manner.Based on this economic and financial background,this article focuses on the research of the risks and risk prevention of government financing platform loans of commercial banks in China.Main research topics of this paper focus on:how to measure the commercial banks loan risks of government financing platform,how to provide scientific and-rational decision making basis for commercial banks to offer such loans,how to improve the credit quality of such loans for commercial banks.Based on the analysis of the basic theory of local government financing platform,this paper emphatically analyzes the operation forms of China's investment firms and the loan risk characteristics.Aiming at the causes of loan risk,the author suggests establishing the risk evaluating system for the local government financing platforms.This evaluating system chooses the indices from self risk,local finance pay risk,macro-economic and district development situation,local government law risk.Combing the experts' advices,it chooses 29 core indices.During assign the weights,quantitative indices adopts objectives evaluation and the qualitative indices adopts subjective evaluation.Percent number is used to evaluate the results:excellent,good,pass and error.In order to measure the indices system,this paper chooses a local government financing platform-Shen Nongshan Tourism Development Lim.,as the object to analyze.The evaluation result is 76.8 which is well fitted with the credit degree provided by the loan bank.In discussing with the local commercial banks,many people think that the evaluating result is accordant with the real situation.Finally,aiming at Chinese commercial banks of local government financing platform loans risks of performance and causes,several suggestions are proposed to defend and control the local government financing loans risks.Moreover,this paper advances the concrete proposals:establishing strict credit mechanism,introducing syndicated loans mode,strengthening financial supervision,exploring other participatory way excluding loans and the moderate usage of asset securitization,etc.