A new super-regulator takes aim at rampant corruption in Chinese finance

Hardly a day passes without someone in Chinese finance “falling off his horse”, or coming under a corruption investigation. State media warned on June 5th that the banking industry is infested with “moths”—mid-level managers who slowly ingest lenders’ resources from the inside out. “Internal ghosts”, executives who use insider connections to pilfer billions from banks, often pose a greater danger. There are “nest cases”, where clusters of fraud spanning several banks are discovered at once, and “skewer cases”, in which the arrest of one banker leads to another, then another. After a recent spate of scandals an official newspaper dubbed smaller banks an “anti-corruption disaster zone”.Such parlance hints at pervasive graft throughout China’s vast financial system, which has assets of 400trn yuan ($56trn). Between January and May at least 60 financial institutions were hit with major investigations into personnel, according to official statements and press reports. Research by shows that, over the past five years, 78 executives at China’s eight largest banks have been investigated or charged with corruption. Since 2018 authorities have also probed 385,000 shareholders of rural banks suspected of using the lenders as personal piggy banks.