Abstract: In order to help regional financial risk management, analyze the formation mechanism of regional financial risks from the comprehensive level and the micro-cause level. This paper uses the panel data of provinces in China to calculate the inter-provincial regional financial risk and local government debt risk, and empirically tests the inter-provincial spatial spillover effect of them.The study found that: China’s regional financial risks showed a trend of increasing turbulence from 2009 to 2017, and the financial risk level of most provinces in 2017 was significantly higher than that during the global financial crisis after 2009, among which the most prominent risk contribution came from local government debt risk; Local government debt risk has a strong spatial spillover effect on regional financial risk, and the resonance mechanism of the two exists; Regional financial risks have a strong spatial spillover effect, and improving the economic foundation, financial environment, rule of law environment and economic participants plays a positive role in mitigating financial risks and local debt default risks.

Keywords: regional financial risk; debt risk; local government; spatial spillover effect