Abstract
In this paper, by using the Statistical analysis Software SPSS20, 30 and Cities of our country’s local government structural debt risk has been carried on the empirical analysis, using the entropy weight method to determine the specific weight of each index, reduced the subjective factors of influence on the result of the index weight distribution, expectations of local government debt defaults and the situation of the comprehensive evaluation index of local government debt. By comparing the size of the threshold value, to determine the risk of local government debt, the results show that in 7 provinces and cities in China are in the state of no warning of local debt risk, in 10 provinces and cities are in the state of mild warning. Means and Cities are in the State of Moderate warning, In other words, it means it’s time to generate the risk of local government debt. In the State of high warning, most means and cities need to take scientific measures to generate the risk of local government debt.
Highlights
Since the 2008 financial crisis, local governments in order to promote the rapid development of local economy, investment in the field of infrastructure and other public livelihood of the people increasing and debt scale expands rapidly, once the accumulated debt risk is higher than the actual capacity of local government, local government will face the severe credit crisis, and even lead to a regional financial crisis, so the local government financial risk early warning research is of great significance
Based on the comprehensive evaluation index method, the expected default rate of local government debt is introduced for comprehensive evaluation, and the specific weight of evaluation index is calculated by entropy weight method, so as to objectively and reasonably reflect the risk of local government debt
They have not yet developed to the extent that they will affect the normal operation of local finance and economy. ohen the expected debt default rate is lower than 0.4% and the state of the composite index is at a red light, it indicates that the risk of local government debt has been moderately warned, and relevant departments should take measures to properly deal with it. ohen the expected debt default rate is higher than 0.4%, no matter what state the composite index is in, it indicates that the local government debt risks are serious, and if mishandled, it will cause the local government credit crisis
Summary
Since the 2008 financial crisis, local governments in order to promote the rapid development of local economy, investment in the field of infrastructure and other public livelihood of the people increasing and debt scale expands rapidly, once the accumulated debt risk is higher than the actual capacity of local government, local government will face the severe credit crisis, and even lead to a regional financial crisis, so the local government financial risk early warning research is of great significance. Combined with the above background, the construction of local government debt structural risk early warning system can predict the development of local government debt risk in advance, so as to timely take necessary measures to control the risk in a tolerable range and avoid systemic risks.In this paper, the situation of local government debt in 30 provinces and cities is analyzed. Based on the comprehensive evaluation index method, the expected default rate of local government debt is introduced for comprehensive evaluation, and the specific weight of evaluation index is calculated by entropy weight method, so as to objectively and reasonably reflect the risk of local government debt
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