Article citationsMore >>

Nguyen T. The Basics of High Yield Municipal Bonds[J]. Investing in the High Yield Municipal Market: How to Profit from the Current Municipal Credit Crisis and Earn Attractive Tax-Exempt Interest Income, 2012: 1-13.

has been cited by the following article:

Article

Credit Risk and Local Government Bonds: A Case from China

1School of Economics and Management, Shanxi University, Taiyuan, China


Journal of Finance and Economics. 2014, Vol. 2 No. 4, 113-117
DOI: 10.12691/jfe-2-4-2
Copyright © 2014 Science and Education Publishing

Cite this paper:
Jiguang Wang, Jingfeng Li. Credit Risk and Local Government Bonds: A Case from China. Journal of Finance and Economics. 2014; 2(4):113-117. doi: 10.12691/jfe-2-4-2.

Correspondence to: Jiguang  Wang, School of Economics and Management, Shanxi University, Taiyuan, China. Email: wangjg@sxu.edu.cn

Abstract

Issuing local government bonds will become a main financing manner and channel of municipal infrastructure in China while its major problem is volumes and credit risk control. Based on the KMV model, the credit risk model for municipal bonds is constructed in this paper and further study the patterns its probability distribution to improve prediction accuracy. After determining the forecast standards, we compute the safe issue volume of those provinces and municipalities who had issued municipal bonds. The end is a brief analysis of the reason to its bad marketing.

Keywords