A senior Chinese banking regulatory official said that the government will adopt a tolerant attitude towards risks caused by financial innovations.

"We can not blame the pioneers in financial innovations as the Chinese banks do not have many experiences in the area," Tang Shuangning, vice chairman of the China Banking Regulatory Commission said. The official said they would be tolerant for indeliberately caused risks, but concerned regulations would be improved.

Chinese banks used to rely on interest rate difference to make profits. After China fully opens its banking sector on Dec. 11, the Chinese banks should lay more emphasis on how to start new financial services to face competition against their foreign counterparts, said Tang.

Chinese residents, who are getting richer, are no longer satisfied with the simple saving and loan services in the banks. There is a demand for financial innovations, he said. The official also said that a mechanism would be developed to relieve commercial banks of risks in launching new financial services.