It was not the shadow banks that brought the US economy to its knees. The deleveraging of all manner of non-bank investment conduits, vehicles and structures certainly magnified the impact of falling house prices, and globalised the crisis. But the core of the problem was the same as in every other banking crisis: sloppy underwriting at mainstream lenders. For the US, read China. The latest data, showing a widening trade surplus while consumer inflation rises to 6.4 per cent, raise further the concerns about overheating. But despite angst over its shadow banking system, the big risks are probably embedded in the real one.

Regulators’ concerns are understandable. Of all the varieties of informal credit intermediation, the biggest – equivalent to 7 per cent of gross bank loans, on Nomura’s reckoning – is entrusted loans. In such loans, a bank acts as an agent on a third-party loan between a depositor and a borrower, and books a fee. As it does not assume any risks or rewards of the loan or the corresponding funds, it typically records it off-balance sheet, at principal amounts. The volume of such deals exploded as China tightened administrative controls on formal lending.

Even so, if the bank with the biggest disclosed exposure at year-end – China Construction Bank – brought its entrusted loans on to its balance sheet, they would total Rmb778bn (about $120bn): significantly less than its fast-growing self-occupied housing loan book, which totals slightly more than Rmb1,000bn. At ICBC, Rmb395bn of entrusted loans was dwarfed by Rmb970bn of loans to manufacturers, the sector showing the highest impairment ratio.