The Research On Appropriate Issue Size Of Local Government Bonds Based On Anhui Province

For local governments,Local government bonds are important means of financing.The credibility of local government bonds guaranteed by local government revenues is very high."Budget Law" has been amended in 2014,local governments have the power to publish bonds,the issue size was the explosive growth.Since then open the door to the autonomy of local government bond issues.By 2016,our country a total of 840 local government bonds,amounted to 7.92 trillion RMB.With the continuous development of local government bond market in China,how to reasonable control the scale of local government bonds issue,control the credit risk is more and more important.In western countries mature bond market also there was a bond default precedent.At the same time,at present,the total scale of local government debt has exceeded 7 trillion,considering the continuous expansion of local government debt,and the credibility of the bond to a certain extent,represents the credibility of local governments,therefore,in the current complex social and economic situation,should not overlook the credit risk of local government bonds,bonds to prevent credit risk is of great significance.Taking Anhui province as an example,using the improved KMV credit risk measurement model has carried on the empirical analysis,through the model to predict the future year income in Anhui province,established the relationship between the income and security issuance,calculated the safety of the local government bond issue size and probability of default(EDF),further illustrate the bond issuance in Anhui province is safe,avoid blind expansion of local government bonds and cumulative risk.According to the empirical conclusions,this paper in order to reduce the risk of default as a starting point,proposed the idea of control the scale of local government bonds.