BEIJING - China will further regulate financial markets and get tough on illegal financial activities, deputy head of China's banking regulator said Tuesday.

"Despite progress in the ongoing financial scrutiny, the market is still prone to risks both currently and for the future period, which should not be taken lightly," said Wang Zhaoxing, vice-chairman of the China Banking Regulatory Commission (CBRC).

"China's financial supervision will be increasingly stricter, with tougher punishment on market irregularities and imprudent operations," he said at the annual meeting of China's city commercial banks.

Wang asked city commercial banks to improve corporate management to further control and address financial risks, especially liquidity risks, which are the largest threat to small and medium-sized banks, and could lead to systemic and regional risks.

The CBRC has stepped up a crackdown on crime and disorder in the market this year, punishing 1,486 banking institutions and 1,096 individuals in January-October, imposing around 600 million yuan ($90.63 million) of fines.

Following the tough supervision, China made progress in reining in risks in its banking sector, with the commercial bank capital adequacy ratio at 13.3 percent, and their provision coverage ratio nearing 180 percent, both relatively high levels, according to CBRC data.