Local Government Debt,financial Leverage Ratio And Regional Financial Risks

In recent years,the rapid expansion of local government debt,especially the invisible debt generated by the increment of local financing platforms,has become a systemic problem affecting China's national economic situation.Such a huge amount of debt caused the rise of financial leverage ratio and caused the rapid accumulation of financial risks in various regions.In order to solve this series of problems,the central economic work conference at the end of 2018 pointed out that to effectively prevent and defuse major risks,we must adhere to the basic idea of structural deleveraging,prevent abnormal fluctuations and resonance in the financial market,and prudently handle the risk of local government debt.Therefore,the theoretical and empirical analysis of the impact mechanism among local government debt,financial leverage ratio and regional financial risk is of great practical significance to discuss how to optimize the structure of financial leverage ratio,alleviate the hidden danger of systemic financial risk caused by regional financial risk and maintain regional financial stability.This paper first introduces the concepts of local government debt,financial leverage ratio and regional financial risk,and summarizes the causes and influences of the three factors.On this basis,the article explains the influence mechanism among local government debt,financial leverage ratio and regional financial risk.Then,on the theoretical basis of the influence mechanism of the three factors,considering the differences in development degree,development mode,debt scale,financial risk degree and other aspects between various provinces and cities,this paper uses the panel model constructed by provincial data to conduct an empirical analysis on the influence relationship among the three factors.In the process of data acquisition,reasonable estimation methods are selected to estimate local government debt,and entropy weight method is adopted to calculate regional financial risk indicators.17 * 8,in turn,by constructing panel data to verify the government debt balance of regional financial leverage,financial leverage effect on the regional financial risks,through a series of tests to choose the appropriate empirical analysis model,in the form of an objective evaluation of local debt increase for the influence of financial leverage and further accumulation of regional financial risk.Finally,according to the empiricalconclusion,the paper gives corresponding policy Suggestions for the government to deal with the high local debt,financial deleveraging strategy and defuse regional financial risks.