Theories based on fiscal guarantees cannot explain either the fact that the continuously decline in local fiscal resources has not significantly increased local government financing costs,or the fact that local govern...Theories based on fiscal guarantees cannot explain either the fact that the continuously decline in local fiscal resources has not significantly increased local government financing costs,or the fact that local government debt has been rising at a time of strict central government regulation.The theoretical and empirical analyses provided in this study show that it is the financial resources under local government control that provide the implicit guarantee for local government debt.Such financial resources lower local governments’financing costs but have the potential to lead to the contagion of financial risk through local government to the financial sector.Therefore,to look at the question solely in terms of either fiscal or financial sector guarantees will not be sufficient to resolve the problem of local government debt.The central government needs to coordinate fiscal and financial policies under a joint management framework in a way that rationally disperses and resolves the risks attached to local government debt and avoids the assumption of excessive risk by either sector.At the same time,close attention should be paid to local financial institutions’asset quality and their money market reputation to avoid the risk of contagion from local financial institutions to local public finance.展开更多
China finds itself in a dual transitional period forboth its economy and its society with the govern-ment playing key role. The government is obliged tomaintain and reinforce its capacity to mobilize and allo-cate soc...China finds itself in a dual transitional period forboth its economy and its society with the govern-ment playing key role. The government is obliged tomaintain and reinforce its capacity to mobilize and allo-cate social resources, to maintain a stable developmentof both the economy and society.the paper,concernedwith the source of funds, has divided national capacityinto national fiscal capacity and national financialcapacity.By calculation and analysis of the fiscal ca-pacity and financial capacity,we will explain the role ofthe finance industry as "secondary public finance."展开更多
文摘Theories based on fiscal guarantees cannot explain either the fact that the continuously decline in local fiscal resources has not significantly increased local government financing costs,or the fact that local government debt has been rising at a time of strict central government regulation.The theoretical and empirical analyses provided in this study show that it is the financial resources under local government control that provide the implicit guarantee for local government debt.Such financial resources lower local governments’financing costs but have the potential to lead to the contagion of financial risk through local government to the financial sector.Therefore,to look at the question solely in terms of either fiscal or financial sector guarantees will not be sufficient to resolve the problem of local government debt.The central government needs to coordinate fiscal and financial policies under a joint management framework in a way that rationally disperses and resolves the risks attached to local government debt and avoids the assumption of excessive risk by either sector.At the same time,close attention should be paid to local financial institutions’asset quality and their money market reputation to avoid the risk of contagion from local financial institutions to local public finance.
文摘China finds itself in a dual transitional period forboth its economy and its society with the govern-ment playing key role. The government is obliged tomaintain and reinforce its capacity to mobilize and allo-cate social resources, to maintain a stable developmentof both the economy and society.the paper,concernedwith the source of funds, has divided national capacityinto national fiscal capacity and national financialcapacity.By calculation and analysis of the fiscal ca-pacity and financial capacity,we will explain the role ofthe finance industry as "secondary public finance."
