Chinese financial regulators will improve regulations for local financial institutions to mitigate risks, the financial stability and development committee under the State Council, said on Thursday.

The committee required local financial institutions, which have played a vital role in serving small and medium-sized enterprises (SMEs), to focus on their core businesses and prioritize services for local SMEs and residents.

While encouraging mergers between well-performing institutions and high-risk ones, it urged regulators to make full use of modern information technology and intensify inspections over shareholders, concentration risks, connected transactions, and data authenticity.

Local financial institutions should enhance risk management, conduct prudent operations, and avoid excessive expansions. There'll be zero tolerance for violations of relevant laws and regulations, it warned.

The committee also called for efforts to correct the government's improper market interventions, improve the local financial environment, and push for innovation in local financial institutions. 

(With input from Xinhua) 

(Cover: VCG)