Research On Local Government’s Hidden Debt Risk Prevention And Resolution Mechanis

Based on the theory of public debt and public crisis management,this paper takes the central government’s prevention and resolution of major risks as the background,and takes the most important of them,that is,the hidden debt risk of local government as the research object.On the basis of dividing the risk into legal risk,debt repayment risk and secondary risk,this paper clarifies the relationship between the risks,and reveals the prevention and resolution of these three types of hidden debt by local government.The preliminary practice and existing difficulties of business risk,and then research and design the prevention and resolution mechanism of local government implicit debt.At the beginning of this paper,the concept and theoretical basis of implicit debt are clarified.On the basis of clarifying the research background and significance,research status,research ideas and methods,innovations and difficulties,this paper defines the concept of implicit debt as all illegal borrowing or guarantee of the government beyond the debt limit,and expounds the application of Keynes and Adam Smith’s public debt theory and crisis decision-making in public crisis management in this paper.The second part of the paper divides the hidden debt risk into three categories and analyzes the risk relationship.The risk classification of this paper is the basis of the whole study.The hidden debt risk of local government is divided into legal risk,debt repayment risk and secondary risk,and the specific formation of the risk is explained separately.In the risk relationship,legal risk and debt paying risk,legal risk and secondary risk have one-way transformation relationship,while debt paying risk and secondary risk have two-way relationship,which can transform each other.The third part of the article summarizes the initial practice of local governments to prevent and resolve three kinds of risks.This paper separately combs the restrictive policies of legal risk,debt repayment risk and secondary risk,and summarizes the practice from the perspective of local government and financing platform.Local governments should abolish illegal contracts to deal with legal risks,open up resources and reduce expenditure to deal with debt repayment risks,strengthen risk monitoring and early warning to deal with secondary risks;financing platforms should change guarantors to deal with legal risks,speed up asset realization to deal with debt repayment risks,and market-oriented transformation to deal with secondary risks.The fourth part discusses the resistance of local government in the process of preventing and resolving the three kinds of hidden debt risks from the perspective of different subjects.It can be seen that legal risks are hard to be eradicated,debt repayment risks remain high,and secondary risks of risk resolution are surging.The fifth part of the paper designs and illustrates the mechanism to prevent and resolve the hidden debt risk of local government.The mechanism of preventing and resolving the three kinds of risks includes root management mechanism,hedge mechanism and defense mechanism.To prevent and resolve legal risks,we need to find out the risk base,improve the responsibility system,and rectify violations to highlight the root mechanism;to prevent and resolve debt repayment risks,we need to control the source of construction projects,activate assets and capital resources,and accelerate the reform of state-owned enterprises to highlight the hedging mechanism;to prevent secondary risks,we need to improve the dynamic monitoring system,improve the risk early warning and disposal mechanism,and set up a risk management system.Insurance funds and financial instruments show the defense mechanism.