China's chief banking regulator said here Tuesday that Chinese banks should pay more attention to possible financial risks in local government financing vehicles, the property sector, as well as other sectors with excessive production capacity.

Liu Mingkang, chairman of the China Banking Regulatory Commission(CBRC), said at a CBRC conference that, given the current complicated economic conditions in China, China's banking industry is still facing challenges to maintain its stable development.

Chinese banks ought to further strengthen loan risk management and carry out stress tests on loans to the property industry and other related sectors, Liu said.

Liu reiterated that banks should maintain the consistency and stability of China's tightening measures on the property market and not relax control on lending for home purchases.

Banks should also tighten loans on industries with high industrial emissions, high energy consumption, excessive capacity and backward capacity, Liu added.

(Xinhua News Agency July 21, 2010)