Moral hazard is a large and ongoing problem in the Chinese financial system. The past few years are full of examples of investors seeking government intervention on their behalf when a financial product goes bad. They have seen this type of behavior for bonds, trust products, wealth management products, real estate investments, and even individual stocks. The moral hazard problem isn’t limited to investors; financial institutions themselves have been the recipients of frequent government bailouts and ongoing support in the form of an implicit government guarantee. It was heartening, therefore, to see regulators take two small steps towards addressing these problems over the past week.