Speaking at the National Financial Work Conference, Xi said China would set up a financial stability committee under the State Council, boost the People's Bank of China's (PBOC) role managing financial risks and create more cohesive regulation. Xi called for greater accountability for financial regulators at the meeting, saying it would be "negligence of duty" if regulators fail to identify risks in time, and it would be "malfeasance" if they fail to report and contain the identified risks.
Despite concerns of the fallout from risks in the financial system, analysts say stability is the word of the day ahead of a once-every-five-years Communist Party Congress.
Serving the real economy is the duty and goal of the sector and the fundamental way to guard against risks, Xi said.
The financial sector should improve service efficiency and quality and channel more resources into major and weak areas of economic and social development, he said.
Guarding against systemic financial risks is the eternal theme of financial work and the government should take stronger initiative to monitor, warn against and deal with risks in a timely manner, Xi said.
China will accelerate developing laws and regulations governing the financial sector, improve macro prudential management and emphasize functional as well as behavioral regulation, according to Xi. The president also said he wanted to ensure China's central bank had a larger role in dealing with such risks in the financial system.
Lian Ping, chief economist at Bank of Communications, said such a committee will help improve the effectiveness of regulation and address challenges brought by increasingly mixed financial services.
Reforms of the financial regulation framework should be based on China's domestic conditions and all financial businesses will be put under supervision, according to Premier Li Keqiang.
Xi said the country would further open up its financial market to promote the internationalization of the yuan and capital account convertibility at a steady pace.