Research On Early Warning And Prevention Of Local Debt Risks

In the process of promoting economic and social development,various local governments borrowed money so as to raise funds and invest more.Local government debt occurred under such cases.While playing an active role,the local government debts also creates debt risk.Especially in recent years,the debt scale has continued to grow and the economy is facing downward crisis.Therefore,it is very important to study the risk warning and prevention of local government debts.This paper first adopts the qualitative analysis to study the basic theory and risk theory of local government debt.Then,this paper put forward the scope of local government debt,namely,in order to provide products,services and facilities of public nature and relevant to people's livelihood,the government directly borrows money or money related to guarantee and salvage obligation,thus the debt fiscal responsibility is generated.The formation mechanism of local government debt is:The powerful political system gives the government responsibility and authority,which provides the basic condition for the local government debt;The government leading industry development model provides the prerequisite for the local government debt:Financial system's incompetence and the incomplete budget management provides the financial conditions for the local government debt;The traditional pattern of investment and financing system provides the financial conditions for the local government debt;The mode of the administrative system and corruption problems provide driving conditions for the local government debt.The main content of debt risk include six aspects:performance risk,liquidity risk,financial risk,economic risk,welfare risk and political risk.The debt risk has the characteristics of concealment,conductivity and accumulation.There are three models of financial risk analysis:the financial risk matrix of Bai Haina,the modified risk matrix,the local debt matrix under the current management document.Secondly,the paper adopts the survey analysis to study the early warning theory of debt,explores the risk assessment through the comparison between debt and resources.And according to the liquidity and utility of resources,this paper uses three levels to discuss.According to the early warning theory,the index system is established,including the first condition judgment index,general debt risk judgment index and systemic debt risk assessment index.Three levels are constructed basing the general debt risk assessment index.The first level includes real debt ratio,actual new debt ratio,actual debt and capital adequacy ratio.The second level is mainly the index of the dependence of debt land;The third level is the matching degree of debt assets.The quantitative analysis method is used to analyze the case of Jiangsu province.This paper analyzes the history and current situation of local debts in Jiangsu province using risk matrix and risk warning index system.After the example analysis,there are generally has no obvious debt crisis first conditions in Jiangsu province;The debt risk is in a controllable state,but the scale of the debt is large and the growth rate is fast.The conditions for the emergence of systemic risk are not present.On the basis of theoretical analysis and case analysis,the paper puts forward the policy suggestions on the risk prevention of local debt in China,which mainly includes:strengthening the foundation and establishing a management system with hard budget constraint.To implement financing platform transformation in various and flexible ways;Resolutely and flexibly implement the reform of investment and financing system;The two methods of law and administration are applied in two ways;Make preparation for a risk warning system and financial reconstruction plan.