No surprise

The bank problems described below will come as no surprise to readers of this blog.

Chinese banks in $2.4bn disaster
Jamil Anderlini, Beijing
June 30, 2007

CHINA'S state auditor yesterday named three large banks for "illegal or
irregular" behaviour involving more than $US2 billion, highlighting the
massive governance problems that exist in the country's financial system.

Bank of China, Bank of Communications and China Merchants Bank, all of which
are listed in both Hong Kong and Shanghai, were cited for making illegal and
irregular loans to the real estate sector and for problems in their
settlement operations.

But, according to the National Audit Office's annual report, the bulk of the
money was the result of outright fraud with $US1.34 billion stolen by
individual employees in 37 separate incidents.