China's top banking regulator said today in Shanghai that credit crunch is easing and pointed out that some banks are flawed in liquidity management and business structure.

Shang Fulin, chairman of the China Banking Regulatory Commission, told the Lujiazui Forum that China's banking industry is not short of liquidity in general as date by June 28 showed that excess reserves topped 1.5 trillion yuan (US$242 billion), more than doubling requirement. The credit crunch that has pushed up interbank money rate to historic high has eased and the issue will not impact the stable growth of China's banking industry, Shang said in a keynote speech at the flagship financial forum in Shanghai.

However, he also noted that some banks are flawed in liquidity management, which was exposed during the credit crunch, and the issue needs highly attention.

Shang added that China's risk of housing loans and lending to the local government financing vehicles is under control. He also called for more transparent disclosure of China's booming wealth management products.