A political advisor on Thursday refuted the view that risks from China's shadow banking will threaten the global financial system.

"Chinese authorities need to pay high attention to the potential risk of shadow banking, but the risk has been exaggerated by some media reports, which is groundless," Yang Kaisheng, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and former president of Industrial and Commercial Bank of China, told a press conference during the ongoing two sessions.

Yang's comment was in response to Bank of England Governor Mark Carney, who warned that the scarcity of regulations on China's shadow banking is posing a risk to the global economy, as reported by Dow Jones Business News Sunday.

According to the international standard, China's shadow banking volume accounted for about 10 percent of the country's GDP in 2012, while the percentage for the US was 150 percent, Yang said.

He explained the standard is set by the Basel-based Financial Stability Board, which defines the shadow banking system as "credit intermediation involving entities and activities (fully or partially) outside the regular banking system."

Yang also said China's banking industry does not face a serious problem with liquidity.

"Both the liquidity ratio and the loan to deposit ratio (LDR) of China's banking industry are in accordance with the regulatory requirement," Yang said.

Chinese bank's liquidity ratio must be at least 25 percent, and the current ratio is nearly 44 percent. The LDR is capped at 75 percent, and the current level is 65.4 percent, according to Yang.

Meanwhile, Chinese banks' funding mainly comes from deposits, which is less fluctuated than funding from other banks, he said.

In terms of non-performance loans, he said China's NPL rate rose slightly to 1 percent by the end of 2013 from 0.95 percent a year earlier, but remains within the safe boundary.

Shang Fulin, chairman of China Banking Regulatory Commission, said the country's banking industry will face a series of changes in 2014, including the country's economic adjustment, the emergence of Internet finance and uncertainties in the global economy, according to his article published in China Banking magazine earlier this month.

"We should neither overstate the short-term impact of Internet finance nor underestimate its long-term influence," Yi Huanhuan, chief analyst with Hongyuan Securities, said in a research note to the Global Times on Thursday.

Internet finance should be guided to better service the real economy, he said.