To resolve the local stock of debt issue, it will not only involve complicated government reforms, but also the cooperation of commercial banks. ANBOUND think tank scholars suggest that it will require continuous reloans from commercial banks for the local debt rollover, given the circumstances that the central government will not be responsible for local debt and local governments will not have the follow-up financial strength to shoulder it either. Therefore, it is of vital necessity to introduce policies in order to encourage the innovation of financial derivative instruments because currently there is a reduced financial policy space due to local debt financing system reform and there are consequences of the previous excess expansion of currency supply under a rigid transmission mechanism of monetary policy.