The list of warehouses for off-balance sheet loans is extensive. Enron had raptors; acronym-happy banks had SIVs and Chinese banks have trust companies. The latter are coming under the spotlight as regulators crack down on an estimated $340bn worth of “informal securitisation”.

That is a fraction of total outstanding loans but big enough to give pause for thought, especially considering the growing number of black spots at Chinese banks. These include loans to local governments, more than $230bn of which are considered to be at serious risk of default, and real estate exposure. This securitisation, however, is a manageable risk. It is not systemic. Trust companies, owned by a hodgepodge of provincial governments, conglomerates and institutions (not to mention foreigners like Royal Bank of Scotland and Barclays), have no skin in the game. They package up bank loans into structured products that are then sold on, usually by the banks themselves, to wealthy retail investors.

Most of the products have short maturities; many will have expired by the end of 2011, when regulators want the loans back onto banks' balance sheets. New sales were suspended last month, following a year-on-year doubling of sales in the first half. While regulators may be fretting about the hit to retail investors if loans sour, the bigger fear seems to be banks' circumvention of state-mandated credit quotas.