China’s 18 biggest banks are listed on both domestic and overseas stock markets. Beijing last week approved another 11 banks lower down the pecking order to go public, too.

In a country threatened by an expanding credit bubble, it is surprising that no one has raised any concerns about this decision. This move would add fuel to China’s credit fire: enabling more banks to raise more capital will enlarge the capital base and the lending capability of an already bloated banking sector.

The government is pursuing two other equally damaging policies. One is the relaxation of credit through a targeted cut to the banks’ reserve requirement ratios. The other is the encouragement of listed banks to sell preference shares now that their stocks are mostly trading below book value.