Study On Local Government Debt Risks Province And Prevention Countermeasures Based On The KMV Model

Over the past four decades of reform and opening-up,the central government has maintained steady and rapid growth of the Chinese economy through a series of major strategic decisions and macro-control policies.In the process of China's social and economic development,as an effective way to raise funds for infrastructure construction and relieve local financial pressure,local government debt also played a constructive role that cannot be underestimated.However,the debt scale of local governments in China remains high and has an non-ignorable growth trend.Based on the risk perspective,this paper conducts a systematic study on the local government debt in China through the overall theoretical analysis and empirical analysis,aiming to explore the feasible path to effectively prevent and control the local government debt risk.This paper follows the train of thought of "theoretical analysis-empirical analysis-policy recommendations".Firstly,this article introduces the reason and significance of the topic selection,then summarizes the existing studies at,and summarizes the literature review from the aspects of local government debt and risk perception,identification of risk sources,differentiated perception of risk transmission path,selection of debt risk measurement indicators and risk prevention and control countermeasures.After analyzing the development history and characteristics of local government debt in our country,our country's local government debt risk identification and the conduction path and so on,the local government debt and risk,and other basic concepts,interpretation of the basic theory of local government debt,are clearly defined in this paper,through constructing risk evaluation system of local government debt at the present stage in China,analyzing on the basis of the overall risk level,also using the provincial government of GDP in 1998-2017 and general budget revenue based on KMV model and panel data in two or three local government debt risk situation forecast.Besides the default distance and default probability of each provincial government are obtained,so as to further quantify the default risk of each province.Finally,in view of the KMV model respectively in 2018 to 2020,the local government debt risk assessment results,predicted in the coming period,the local governments in China will continue to maintain the overall moderate debt,debt risk overall controllable characteristics.Based on the theoretical analysis and empirical analysis results,we make attempytions to offer suggestions of strengthening our country local government debt risk monitoring,in order to further deepen the reform of the fiscal and taxation systems,and to improve the national management system.Based on the results of empirical analysis and combined with the actual situation of China's fiscal system reform,this paper puts forward policy Suggestions on prevention and control of local government debt risk at the current stage,which mainly include the following four aspects:comprehensively deepening the reform of the fiscal system,matching the financial power and administrative power;We will improve law-based governance of local government debt,standardize guarantee measures,try to avoid moral hazard,strengthen oversight measures,and standardize government borrowing.The research conclusions of this paper have certain practical application value,hoping be able to help local governments in the process of promoting regional economic development efforts to avoid debt risk,and to deepen the reform of fiscal and taxation system in China,improving the modern financial system,optimizing the local government debt risk prevention and controling provide useful reference.