Shanghai will learn from the Wall Street financial crisis and tighten risk controls as it builds itself into an international financial hub, industry observers said in Shanghai yesterday.

The global financial turmoil started because of a lack of ample supervision and the oversupply of credit to the world economy and this taught the financial industry in China a good lesson on how to balance innovation and supervision, said Wu Jianrong, deputy secretary of the Shanghai Financial Work Committee, yesterday.

"The US financial crunch taught us that the financial industry can't derail the development of the wider economy," said Wu. "When innovation is launched in the Chinese financial markets, risk controls should be one of the priorities" that interested parties should pay attention to.

Unlike the United States market, the Shanghai financial industry is far from oversupplying the economy and the city still needs to build the industry on the principles of risk control and healthy development, the official said.

The People's Bank of China and China Banking Regulatory Commission yesterday also voiced support that innovation and supervision in the market should be balanced.

(Shanghai Daily October 16, 2008)