By Chen Jia

Chinese monetary authorities stressed stabilizing prices and maintaining financial stability, vowing to take measures to prevent potential risks in property financing, cross-border capital flows and bond market, according to a senior central bank official on Saturday.

The central bank, the People’s Bank of China, will improve the so-called macro-prudential policy framework, which requires building a full-range financial risk monitoring and warning system, especially to supervise activities of adding leverage, debt, and financial cycles, PBOC Vice-governor Li Bo said at a forum.

Li said to establish targeted policy tools and include influential financial activities, financial institutions, financial markets and related infrastructures must be placed into the macro-prudential management system to prevent systemic risks.

The PBOC will further optimize the financial regulatory framework, consider further clarifying and separating the prudential supervision function and behavior supervision function of regulatory authorities, Li said at the forum held by Tsinghua University PBC School of Finance.

"Prudent regulation", as the PBOC official introduced, is focusing on risk prevention, based on financial institutions’ prudent operation, which seeks to ensure the robust and healthy management of financial service providers. To identify the targets and responsibilities of prudent regulation is also a key part of China’s financial regulatory reform in the next step.

China's Cabinet-level financial regulatory body held a meeting on Friday, called to maintain prudent monetary policy and make it flexible and appropriate to better serve the real economy.

Credit policy, in the meantime, should be targeted and match the needs of market entities, while maintaining adequate and reasonable liquidity, the Financial Stability and Development Committee under the State Council said in a meeting statement.

The meeting was chaired by Vice-Premier Liu He, who is also head of the regulatory committee. The statement highlighted preventing financial risks, especially in promoting reforms in medium and small financial institutions to reduce credit risk. The regulation on financial activities of platform enterprises should be strengthened.

It vowed to crack down on bitcoin mining and trading, and prevent individual risk to spread to society.

The financial regulatory body also warned of shocks from overseas, asking to deal with imported inflation and enhance expectation management, with well-prepared policies, according to the statement.