BEIJING - China's recent financial regulatory tightening has stabilized the market and risks in the banking sector are completely controllable, a senior banking regulator said Friday.

The banking industry is now operating in a more stable manner, and the market does not have to be nervous about scrutiny, said Xiao Yuanqi, head of the prudential regulation bureau of the China Banking Regulatory Commission (CBRC).

Xiao said liquidity in the banking system is "very abundant," and banks are seeing increasing their capabilities to fend off risks.

He cited figures that the provision coverage ratio of commercial banks, a measure of funds set aside to cover bad loans, was 178.8 percent by the end of first quarter.

Chinese financial regulators are increasing financial risk control and de-leveraging, as solid GDP growth in the first quarter provided more room for such adjustments.

While pushing forward regulatory scrutiny, the CBRC has given full consideration to the actual situation in the banking sector and evaluated its influence on financial institutions and the market, said Xiao.

"We should not trigger new risks by removing the existing ones," said Xiao.

Chinese lenders' bad loan ratio remained almost flat at 1.74 percent at the end of March 2017, according to CBRC data.

The average capital adequacy ratio, the ratio of a bank's capital to its risk-weighted assets, stood at 13.3 percent.

Net profits of all Chinese lenders stood at 493 billion yuan ($70 billion) in the first quarter, representing growth of 4.6 percent year on year, according to the CBRC.