Clamp-down in China

Fraud at Chinese banks is rife, and the industry’s lack of effective controls is a key factor. But a major clamp-down is on the horizon. By Duncan Wood

It must be pretty rare for "girls with Louis Vuitton bags" to be cited as a contributory factor in operational losses, but Keith Pogson, a Hong Kong-based partner with Ernst & Young (E&Y) says these young, fashion-conscious denizens of Shanghai and Beijing are one illustration of the difficulties facing Chinese banks as they struggle to control fraud and corruption.

"People see the glitzy skyscrapers in Shanghai and forget about the poverty in the west of the country," he says. "There’s a big