Research On The Impact Of Local Government Debt Expansion On The Risk Of Commercial Banks

China's economic development has entered a new normal,the population dividend has gradually weakened,the growth rate of local fiscal revenue has gradually slowed down,and the financial rights and powers do not match.Some local governments have to borrow debt to solve the local financial pressure,which will undoubtedly increase the local government's debt repayment pressure.The continuous expansion of the scale of local government debt has caused the public's concern about the risk of local debt.As the main risk carrier of local debt,the risk of commercial banks can not be ignored.In this context,it is of great significance to explore the relationship between local government debt expansion and commercial bank risk,as well as the effective way of risk control.First of all,this thesis classifies the domestic and foreign key documents,on this basis,it specifically expounds the relevant theories of local government debt,commercial bank risk and the main mechanism of the impact of local government debt expansion on commercial bank risk.After that,this thesis analyzes the current situation of local government debt and commercial bank risk in China,and puts forward the existing problems of local government debt.After that,this thesis first explains that commercial banks are the risk carriers of local government debt expansion through the bank decision-making model,and then selects the quarterly data from the third quarter of 2009 to the second quarter of 2019 as the variable samples.By constructing the VAR model,this thesis empirically analyzes the specific impact of local government debt expansion on the credit risk and liquidity risk of commercial banks in China.The empirical results show that commercial banks are the risk carriers of local government debt expansion The credit risk and liquidity risk will suffer from the positive impact of local government debt scale expansion.Finally,combined with the empirical results and the actual situation of local government debt and commercial bank risk in China,this thesis puts forward targeted countermeasures and suggestions,The specific suggestions are:to improve the debt risk management system and to promote the modernization of debt management;to strengthen the assessment of debt fund utilization efficiency and to form an incentive for officials to improve the efficiency of fund utilization;to strictly emphasize the local government's own debt repayment responsibility and to establish a decision-making accountability mechanism;to strengthen the institutional constraints of commercial banks on local government debt loans,so that local government debt financing will gradually return to the market.