The central government is examining ways to plug the legislative and judicial loopholes involving financial crimes, Liu Mingkang, chairman of the China Banking Regulatory Commission, said yesterday. At a symposium on the rule of law in the financial sector, the head of the banking watchdog highlighted the inefficiency of the country's safeguards against financial - especially banking - crimes. Mr Liu said it was difficult to define what constituted such offences, in the absence of judicial and legislative interpretations of financial crimes under the Criminal Law. 'It is quite common for cases to be 'bounced back' after being transferred [to judicial bodies for prosecution],' he was quoted as saying by Xinhua. Mr Liu said proposals on how the law should be interpreted would soon be submitted to the National People's Congress Standing Committee for evaluation. The commission was also considering widening the scope of crimes under the law - to include embezzlement and illegal offering of loans, for example. A central bank official told the symposium that the Legislative Affairs Office under the State Council, the mainland's cabinet, had already set up a taskforce to study the issue. '[An] amendment [to bring the Criminal Law up to date] will mainly target the most severe financial crimes,' said Zhu Hong , a division chief from the People's Bank of China's Treaty and Law department. Mr Liu said co-operation with overseas authorities was another area to be strengthened in the fight against financial crimes. '[We should] focus on establishing communication mechanisms with judicial authorities in other countries, and step up efforts in the repatriation of criminals and state-owned assets,' he said. Meanwhile, the National Development and Reform Commission yesterday warned in a research report that the mainland's banking sector faced four main dangers: from credit, interest rates, operations and liquidity. The report, compiled by the commission's Research Institute of Restructuring the Economic System, said the largest risk facing the mainland's banking sector was in the area of credit. Commercial banks' balance sheets and asset quality have improved in recent years, with the absolute amount and ratio of non-performing loans in decline, according to official figures. Last year, 13.2 per cent of mainland bank loans were non-performing, it said. However, international institutions said the real percentage was likely much higher. The risk from fluctuating interest rates would have a huge impact on commercial banks, following the government's projected reform scheme to let market forces determine rates. The commission said there was an urgent need for commercial banks to guard against operational risks, which stem largely from the failure of internal controls. The liquidity danger - a lack of cash flow - was faced by other business sectors, but eventually became a risk for banks, it noted.