On the issue of refinancing risks of the region with bank lending

Abstract

The refinancing risks faced by the region when lending in commercial banks are examined in the article. The author analyzes the correlation of risks and the effectiveness of implementation of regional state programs. The main problem lies in the interrelation between cost of debt parameters and qualitative indicators of the effectiveness of such programs. In the present conditions the main criterion for the effectiveness of regional borrowing is the ability to provide a balanced debt policy. It is related to the needs of the region and should not have the cash gaps, overpayments of interests in order to ensure effective spending of borrowed financial resources. The basis for a balanced debt policy in the region is the analysis and consideration of the related risks, the ability to anticipate and avoid various crisis situations. The work presents approaches to the assessment of refinancing risk of the region-borrower (on the example of Tver region crediting in commercial banks). The probability that the debt will not be able to be refinanced over a long period is insignificant in terms of the balanced policy of the Central Bank of the Russian Federation and the Ministry of Finance of the Russian Federation, the reduction of the rate of inflation. Current trends in the state fiscal policy allow us to make a conclusion about the low percentage risk. In the credit market there is a trend to lower interest rates; debt refinancing is going to be made at rates not higher but lower than the current ones.