In a speech at the 2020 Bund Summit in Shanghai, Alibaba Group founder Jack Ma said the Basel Accord has led to a global trend of focusing only on risks control rather than development.

He said China's problem is not systemic financial risks, but the lack of a financial ecosystem, adding that he hopes regulators will loosen their grip on industries to support innovation.

It is true that easing the constraints on financial market innovation, even moderately, will create bigger business space for new entrants. However, for the market regulator, financial security comes first, and the interests of financial enterprises cannot be greater than national security. President Xi Jinping stressed that financial security is an important part of national security and an important foundation for steady and healthy economic development, and maintaining financial security is a strategic and fundamental issue that has a bearing on China's overall economic and social development.

The Basel Accord lays emphasis on controlling risks that go along with financial innovation. In the United States, an investigation committee found that the 2008 subprime crisis could have been averted had policymakers and regulators not turned a deaf ear to market warnings or underestimated the risks. It concluded that the absence of financial regulation and oversights, especially on shadow banking and derivatives, harmed the stability of the US financial market. A major reason for the absence of regulations, it said, was that the financial sector wields enough power and wealth to influence policymakers and regulators.

China has established a huge banking, stock market and bond system. However, this has led to new regulation risks and challenges. This is why China's decisionmakers have repeatedly put emphasis on preventing and controlling financial risks, and strengthening financial supervision to defuse potential financial risks.

Recent years have seen the accumulation of excessive local government debts and creation of asset price bubbles, as well as financial innovations encouraging and supporting economic transformation and upgrading. This has led to the emergence of internet-based financial products, some of which have caused losses to investors.

It is the financial regulators' responsibility to prevent systemic risks and protect ordinary people's money. China must always give priority to financial security. And to do that, as well as to promote the formation of a new and efficient financial system, it must advance the reform of corporate governance in the financial sector and strengthen the concept of prudent and compliant operation.