Li Ruogu (right), former chairman of the Export-Import Bank of China, shakes hands with Ryozo Himino, vice-minister for international affairs of the Financial Services Agency of Japan, after a seminar of the Boao Forum for Asia, March 24, 2017. [Photo/China Daily]

Speakers at the Boao Forum for Asia on Friday called for a more adaptive Chinese financial system, as the economy embraces a new structure and focus.

The credit-dominant financial landscape will have to end, together with the investment-driven model, said Ba Shu-song, chief economist at the China Banking Association, in a panel discussion.

Citing an example of the existing anachronistic system, Ba said: "Given their collaterals, traditional sectors or even those plagued by overcapacity stand a better chance to locate loans compared to the new economy such as movie production."

With China seeking growth also from innovation and services rather than just manufacturing-led exports, the country should make greater efforts to encourage diverse financing channels, including stock offerings and funding by private equity and venture capital firms, he said.

The market participants would rely on new measures other than commercial banks' loans to assess and price in risks, he said.

Ba's remarks come amid proposals to reduce leverage in the country. Chinese banks extended 3.2 trillion yuan ($464.9 billion) in new yuan-denominated loans in the first two months of this year, which is comparable to the same period last year.

The country's banking assets totaled 228 trillion yuan at the end of January, up 14.4 percent year-on-year, according to the China Banking Regulatory Commission.

"China needs to accelerate the development of a multi-layered capital market to help diversify risks," said Wu Xiaoling, former deputy governor of the People's Bank of China, at the event.

Wu said a coordinated regulatory system should be in place to ensure unified disclosure standards and transparency.

Li Ruogu, former chairman of the Export-Import Bank of China, said: "We hope regulations in general will be more 'user-friendly', guiding financial institutions to better support the real economy."

Just as in the United States, financial institutions elsewhere tend to seek more leverage in profit-seeking, said Jim Stone, chairman of Plymouth Rock Assurance and former chairman of the US Commodity Futures Trading Commission.

The central theme of regulation, therefore, should be targeting and control of excessive leverage and maximizing disclosure, in order to have a sensible financial system, Stone said.