A bitter turf war between China’s top two financial watchdogs – the China Banking Regulatory Commission and the People’s Bank of China – is obstructing reforms and efforts to tackle risks in the financial sector, according to officials from both agencies.

From the outside, the Chinese system can often look like a monolithic structure but the various arms of the bureaucracy are often engaged in vicious institutional battles that can delay or even thwart policy.

In just one example of how rancorous the split has become, several people familiar with the matter say that a Financial Stability Council chaired by the PBOC, the central bank, and including the heads of the main financial regulatory bodies has met just once since it was established last August. The dispute comes after several high-profile defaults in recent weeks including the first ever public domestic bond default in modern history and a small bank-run in eastern China.