In the three years since Guo Shuqing took the helm at China’s top banking regulator, he has won praise for an aggressive drive to tackle problems in the $40tn industry — in particular, his war on bad loans and excessive leverage.

But the fallout from the coronavirus outbreak that has throttled parts of China’s economy has delivered a savage blow to his reform programme. One consequence of the crisis — which has killed more than 1,500 people and squeezed China’s economy — will be to saddle the country’s banking system with hundreds of billions of dollars worth of new  non-performing assets.

“[The virus epidemic] is disastrous for bad debt and will certainly cause Guo to lose a bit of clout,” said the head of a foreign lender in China, who has worked closely with the banking watchdog.