Papers Category:Securities Finance Papers
- Debt Market Papers
Post Time:2011-12-26 11:02:00
Abstract: In recent years, China's local government debt showed up accumulated and growing, a large local government debt has an impact on economic and social stability and development of important factors, increased expenditure, financial debt increased risk Douran, this reality has aroused the parties concerned and attached great importance to this article on prevention of local government debt analysis.
Keywords: government debt, the main mechanism for local governments to repay debt is the local government as a debtor, because of past transactions or events caused by the outflow of economic resources will result in the Government's existing responsibilities. Government debt related to the government's reputation, affect local investment and development of the soft environment, how to effectively prevent and resolve the financial consequences of government debt risk, to not only promote sustainable economic and social development, to ensure the smooth operation of financial and economic, is the implementation of governmental The more debt the purpose of scientific management.
First, to enhance risk awareness, according to the appropriate government financial debt
Government and relevant departments and units to establish a certain risk awareness and sense of urgency, the government debt is always the risk of harm and prevent the risk of government debt to maintain a clear understanding of the importance To fully understand the government borrowing must be with the local economic development situation and available financial resources to adapt incrementally, according to local economic and social development, fiscal situation and the scale of existing government debt, a scientific and rational development of government debt and long-term planning in the debt burden to ensure a balanced situation, planning for the future The debt maturity and structure of government debt for different degree of risk, and make a reasonable debt funding in the future, then take corresponding measures to restrict borrowing, and also to prevent re-light only through the pursuit of the number of loans, ignoring the tendency to project quality, the use of debt capital to protect the effectiveness and ability to repay.
Second, improve the management structure, clear of the main strict approval system at all levels of government should strengthen the centralized management of government debt, further clarify the financial sector in the government debt management in the dominant position, prohibited government departments and units directly or indirectly bear the debt debt obligations, debt as soon as possible to reverse the long, scattered use of fiscal transparency of the situation as the competent authority of government debt, the financial sector within the region to assume the debt to the government unified supervision and management responsibility to fully perform their functions, according to public financial requirements, strictly define the scope of debt, levels of government approval to set up the government debt management and leadership team, responsible for the corresponding levels of debt borrowed for government scrutiny and closely monitoring the government's use of debt repayment. the financial sector to be integrated financial platform, make an inventory of state-owned assets, centralized management, to avoid the various departments and units directly or indirectly bear the debt service debt obligations, the risk of government debt lead to a deeper level. stringent capital construction program, regulate the investment management practices, in particular, to eliminate the funds to invest in government debt management and competitive field, to achieve the financial investment of funds and the effective supervision of financial activities. to guard against and defuse financial risks in order to focus on the implementation of debt financing from the start, combined with budget reform, gradually management of government debt into the budget and establish a scientific and effective mechanism for government debt management, debt and solvency to budget constraints, to achieve financial sustainability.
Third, the implementation of the debt obligations, improve the government's debt management system
Management approaches to establish a government with a clear system of government borrowing, the scope, principles, procedures, conditions, establish and improve the responsibilities, rights and interests by combining with, but also the unity of the government debt management, and effectively optimize and implement debt program, in determining the borrowing plan, debt plan must be developed, a clear source of funding for debt service. for a fee and other operating income as a source of debt, the expected revenue to be carefully calculated assessment to ensure reliable sources of debt financing, to avoid income plans have fallen, the impact of debt repayment. reality, many debt units in order to borrow through the program easily, to borrow more money, tend to overestimate the borrowed items of income, and after the project put into operation large gap between real income, resulting in debt-servicing difficulties, this situation must change, the need for debt financing arrangements as a source of funds of funds, in the development of a scheme must be examined and approved by the financial sector and government approval, the financial sector according to the compensation debt to debt financing plan included in the budget and time allocated for the land transfer income as a source of debt financing, development, utilization and transfer of land must comply with state laws and regulations and the planning, and give full consideration to land approval, transfer pricing, policy changes and other uncertainties. causes of debt due to different sources of funding changes, the importance of timely debt adjustment plan, re-implementation of the debt funding, debt service program to ensure safe, reliable and to strengthen inter-governmental lending fund management, focus on repayment capacity. a large number of local governments to obtain the so-called achievements, regardless of the actual needs of local, regardless of the benefits of the project, regardless of the level of financial solvency, to find ways for agricultural development bond lending and lending funds funding this part of the project on-lending funds, but also by time easily when difficult, the higher the financial means but to take charge of the recovery of funds, leading to debt problems of local government financial operation, or the formation of public spending crowding out other types of debt conversion, or to the higher financial take on new debt repayment. Therefore, the inter-governmental lending funds to strengthen the management. Links to free download http://eng.hi138.com
Fourth, clear debt the main mechanism for the establishment of local government debt to repay debt, the local government debt management is an important part of the work, first to establish and perfect the mechanism of debt, clear debt obligations, according to the "who the borrower, who section, who guarantees, who is responsible for "principle, clear responsibility, to determine the borrowing debt obligations of the main, bear the main responsibility for debt repayment by the task, to further improve the responsibility system, to take binding measures to increase supervision, strengthen the the main responsibility for debt service debt. debt service obligations of the main unit to organize implementation of the debt financing, and timely payment of principal and interest under the contract, for some reason the debt repayment plan to determine the funds can not be implemented, repayment difficulties, should do everything possible to raise other funds to make up for the lack of debt financing and take the initiative to communicate with the claims unit to ensure full and timely repayment of maturing government debt. and then to establish a sinking fund, which is to ensure that the government's reputation and finances necessary for sustainable development measures from the theory, the debt service reserve fund and other normal expenses, just as a financial expense, or when uncertain of the debt into direct debt, debt service reserve fund large-scale local governments can reduce short-term facing pressure to pay for some of those who own the debt solvency project, local government should balance its operations and financial monitoring, asking them to develop a repayment plan, and monitor implementation.
Fifth, to broaden the channels of financial resources, strengthen the government's solvency government should firmly establish the concept of integrated financial, in the effective management of financial resources to strengthen the government at the same time co-ordinate arrangements for other government resources available to expand the government's macro-control capability to meet the overall balance purposes. Completely vested interests of local authorities to break the barriers to the department for individual ownership-based decision-making into a market-based public policy, government decision-making to improve the openness and transparency, improve the efficiency of government resource allocation. For competitive projects, financial in the future should not be guaranteed; really necessary financial guarantees for the project, in order to reduce security risks, the local government according to the nature and characteristics of the project, establish a sound security classification, security and physical security against a series of effective system of guarantees. in the future as China's local government debt financing of diversification and standardization, local governments should continue to reduce the debt scale and scope of the guarantee of security, but should be by other means, such as financial subsidies, financial discounts, equity, holding, etc. to achieve the purpose of financing, improve the level of local government credit, establish a sound mechanism for local government debt. sinking fund has paid, debt relief, regulating proliferation and security advantages, in order to rationalize the size of the debt, the reserve funds to strengthen local governments, local governments should establish and regulate the extraction of the sinking fund, storage, management and use of other related systems. sinking fund local government should include the major sources of funding, the local government's annual budgets, fiscal balance transfers, debt commission and other benefits of the project in sinking fund sufficient to ensure the establishment of long-term operation and stability under conditions, sinking fund must be earmarked for a variety of local government debt.
Sixth, innovative financing mechanisms to broaden the financing channels for the construction of urban infrastructure face the opportunities and challenges, shall establish a socialist economic system, market-oriented system, the introduction of market competition, the spirit of "a modest advance, driven by the city space expansion, and promote urban economic development "principle, adhere to highlight to a hub, functional facilities, traffic and construction information environment focus. to modern transport and information infrastructure to drive the modernization of the city. may take the following measures:
1, strengthening the legal system construction, the development of sustainable urban infrastructure development strategy and planning should be improved urban infrastructure laws and regulations, strengthen local government's management functions, the establishment of specialized institutions for the rational distribution of urban infrastructure construction and harmonization .
2, deepening reform, the establishment and improvement of infrastructure construction and operation of the market system reform and the current government monopoly of the highly centralized management system, to further break the monopoly and introducing competition mechanism to encourage different economic sectors, and financial enterprises in different sectors, particularly for foreign enterprises to enter infrastructure, operational areas. 3, innovative financing mechanisms to broaden the funding sources.
All levels of government should seize the financial crisis to increase infrastructure investment in new opportunities to accelerate institutional innovation and mechanism innovation, infrastructure projects should be in accordance with international practices, through domestic and international market raise funds for construction. 4, the expansion project construction and management of user involvement in the formation of a good incentive.
5, in order to promote technological progress the development of urban infrastructure the Government in raising funds to accelerate urban infrastructure construction, should give full play to advantages, to introduce and develop new technologies, through technical innovation to achieve leapfrog development of infrastructure, reduced construction time saving development costs, improve management effectiveness management, to maximize the efficiency of input and output. Links to free download http://eng.hi138.com
References:  Mariner, <<to prevent and resolve local government debt Risk of >>,<< public business>>, 2009, No. 9,
 Li Yan, Zhang Zhihong, <<China's local governments to issue bonds Thinking >>,<< economic issues to explore>>, 2010, No. 04.
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