After years of hyper rapid credit growth, China’s leadership now has a laser-like focus on reducing financial risk. Not so long ago this issue was met with official silence. Since late 2016, President Xi Jinping has devoted half a dozen speeches to the topic.

Such top-level attention has already led to substantial policy changes. The head of the insurance regulator, which had allowed companies to sell short-term life policies to finance illiquid, long-term investments, was fired and more restrictive policies have been strictly implemented. New aggressive leadership took over at the bank regulator, which almost immediately issued new rules to curtail regulatory arbitrage by banks and began to investigate excessive lending to a small number of companies that were making large foreign acquisitions.

The central bank took steps to raise short-term interest rates, including importantly in the interbank market. Finally, the state council, China’s cabinet, last month established a Financial Stability and Development Commission to better co-ordinate supervision among the various financial regulators.