Culture flub

20 November 2014 By John Foley Follow @johnsfoley

Chinese bankers who allegedly helped a rogue CEO siphon off $102 mln have some things in common with London’s abusive FX traders. Institutions are sprawling, regulators weak and loyalties mainly local. At least China’s willingness to micromanage ought to help curb bad behaviour.

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Bank of England Governor Mark Carney said on Nov. 17 that new rules to control the fixed pay of bankers may be needed to ensure individuals can be held responsible for excessive risk-taking and misconduct.

Speaking just five days after a combined $4.3 billion settlement between four regulators and six banks over rigging of the foreign exchange market, Carney suggested that the problem was not “a few bad apples” but “the barrel in which they are stored”.

On the same day, NVC Lighting said employees of four leading Chinese banks were under police investigation for allegedly helping the Hong Kong-listed Chinese manufacturer’s chief executive divert funds and obtain loan guarantees amounting to around 623 million yuan ($102 million) without the company’s knowledge.

The banks include Industrial and Commercial Bank of China, the world’s largest bank by assets, as well as Bank of China, China Construction Bank and Minsheng.

BOC declined to comment immediately. Spokesmen for Minsheng Bank and ICBC told Reuters they had not heard of the case, while CCB could not be immediately reached for comment.

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The banks include Industrial and Commercial Bank of China, the world’s largest bank by assets, as well as Bank of China, China Construction Bank and Minsheng.

BOC declined to comment immediately. Spokesmen for Minsheng Bank and ICBC told Reuters they had not heard of the case, while CCB could not be immediately reached for comment.

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