Analysing credit risk in large local governments: an empirical study in Spain Lara Rubio, Juan Rayo Cantón, Salvador Navarro Galera, Andrés Buendía Carrillo, Dionisio Credit risk Default risk Local government Systematic factors Basel II In governments throughout the world, bank lending excesses, solvency issues and worsening credit ratings have all contributed to raising risk premiums and impeding access to credit, thus provoking a major financial problem in the public sector. Accordingly, tax authorities and regulators need to analyse the causes of public sector bank debt, doing so through the joint study of idiosyncratic and systematic variables, an area that has been neglected in previous research. This paper examines idiosyncratic and systematic factors that may influence local government credit risk through an empirical study of the performance of 148 large Spanish municipalities during 2006–2011. We identify individual factors relevant to the probability of local government default (such as dependent population, per capita income and debt composition) and also determinants associated with macroeconomic developments, such as gross domestic product and the risk premium. 2024-02-26T11:58:24Z 2024-02-26T11:58:24Z 2017 info:eu-repo/semantics/article Published version: Juan Lara-Rubio, Salvador Rayo-Cantón, Andrés Navarro-Galera & Dionisio Buendia-Carrillo (2017) Analysing credit risk in large local governments: an empirical study in Spain, Local Government Studies, 43:2, 194-217. https://doi.org/10.1080/03003930.2016.1261700 https://hdl.handle.net/10481/89584 10.1080/03003930.2016.1261700 eng http://creativecommons.org/licenses/by-nc-nd/4.0/ info:eu-repo/semantics/openAccess Attribution-NonCommercial-NoDerivatives 4.0 Internacional Taylor & Francis