Joint efforts vital to curbing risks in China's banking sector

China pushes for more coordination among regulatory agencies.

Hu Xiaolian, a vice central bank governor of the People’s Bank of China, the central bank, said Chinese regulators must strengthen policy coordination to ward off potential financial risks resulting from overcapacity and debt problems.

"Overcapacity and excessively high debt levels in some sectors will create hidden dangers for potential financial risks," she said

"We need to strengthen policy coordination, strengthen systemic (risk) monitoring and macro-prudential regulatory requirements, only in this way we can firmly safeguard the bottom line in preventing systemic and regional financial risks."

Hu's remarks followed the recent establishment of a new supervisory mechanism under which the central bank plays a leading role in coordinating policies and financial regulations.

China's main financial supervisors include the PBOC, the China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC), China Insurance Regulatory Commission (CIRC) and the State Administration of Foreign Exchange (SAFE).