‘If the banking industry becomes a complete mess, as the chairman of the China Banking Regulatory Commission, I will resign!” There can be little doubt that this declaration, attributed to regulator Guo Shuqing, signals an upsurge in Beijing’s will to discipline its unruly financial system and rein in a huge credit bubble. The threat to resign, reported by the respected Caixin media company, was said to have been made at a meeting of financial regulators on April 21.

But the questions for investors are a great deal more nuanced than Mr Guo’s warning. So vast is the netherworld of shadow finance and so prevalent is the chicanery that the regulator is targeting that any effort to clean it up would shake China’s financial architecture to its timbers.

“It is clear that ‘inappropriate’ transactions and financial arbitrage are system-wide phenomena in China, not the actions of a few isolated entities,” said Chen Long, economist at Gavekal Dragonomics. “Basically every commercial bank in China is involved in at least some of the long list of activities now targeted by regulators.”