著者

大東 辰起

雑誌

大阪産業大学経済論集 = OSAKA SANGYO UNIVERSITY JOURNAL OF ECONOMICS (ISSN:13451448)

巻号頁・発行日

vol.18, no.3, pp.35-63, 2017-06-30

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Private sector funding was used in the government’s economic stimulus package after thecollapse of the Bubble economy (1991-1993). As a result, outstanding local bonds increased,and differentials expanded due to erosion of borrower credibility in the market. In March 1999, Japan Rating and Investment Information Inc. reported for the first time theJapanese municipal bond rating. In November 2006, Yokohama City obtained R & I. Withthis Japan has rapidly facilitated the use of municipal bond rating. Accordingly, much previousresearch has predicted that the acquisition of municipal bond rating will increase. However,this is not the case at present. Here the municipal bond rating is examined, and the following three issues are discussed.The first is the relationship between implicit security and municipal bond rating. I show thatfor local governments ratings are not essential, because of the macro and micro revenueprotection under the Ministry of Internal Affairs. The second is that municipal bond ratingsdone for local governments do not properly reflect financial benchmarks, resulting in a lackof confidence for these ratings. The third is that investor’s trust in municipal bond rating isquestionable. The discussion clarifies the need for rating companies to disclose accurate information,and the necessity for dialogue with the parties concerned for higher evaluation from localgovernments and investors.

著者

大東 辰起

出版者

大阪産業大学

雑誌

大阪産業大学経済論集 (ISSN:13451448)

巻号頁・発行日

vol.18, no.1, pp.29-55, 2016-10

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Since the bubble economy collapse, local bond funds have drawn attention due to the increase of outstanding local bonds. One of the local bond funds is government funding. Local governments annually obtain great amounts of funds from government funding, which is known to be good, as long term, stable money. Previous research has shown the following issues. The first issue is the local government's control through government funding, and distribution of government funding as financial support by concentrating funding in weak local governments. A secondary issue is the relaxation of fiscal discipline due to receiving bonds as an easy solution to obtaining funds. This paper reveals that these issues are no longer current problems.Since the bubble economy collapse, local bond funds have drawn attention due to the increase of outstanding local bonds. One of the local bond funds is government funding. Local governments annually obtain great amounts of funds from government funding, which is known to be good, as long term, stable money. Previous research has shown the following issues. The first issue is the local government's control through government funding, and distribution of government funding as financial support by concentrating funding in weak local governments. A secondary issue is the relaxation of fiscal discipline due to receiving bonds as an easy solution to obtaining funds. This paper reveals that these issues are no longer current problems.