Talk is always impressive at five-star hotel conference panels, especially when China's banks are the subject. Their governors have an international outlook, wear expensive brand-name suits, speak fluent English, drink good wine and share cigars with their foreign, investment-banker counterparts.
But Liu Minkang, chairman of the newly established China Banking Regulatory Commission (CBRC), is not so easily impressed. China's Anti-Corruption Bureau recently announced more than 4,000 cases of state and public asset embezzlement, most involving the financial sector. Mr Liu is busy trying to clean house.
He is combining the CBRC's forces with the People's Bank of China (PBOC) and the Ministry of Finance, in establishing an Audit Inspection Committee aimed at countering irregularities. Mr Liu himself is fed up with internal bank corruption and inefficiency which, all too clearly, could bring down the entire system if unchecked.
China tackled its non-performing loan problem by transferring 1.4 trillion yuan (HK$1.3 trillion) in such loans, after 1999, from the books of the four largest state-owned commercial banks to asset-management companies.
Unfortunately, during this period, state-owned commercial banks racked up another 1.7 trillion yuan in new non-performing loans, primarily made to the real estate sector.
China's bank problems are entangled with the real estate schemes of rags-to-riches private tycoons, whose overnight fortunes arose largely from spending bank loans drawn against such projects. Tycoons have duped China's banks by adopting the following five tricks:
One, create the appearance of frenzied business activity reinforced by extravagant behaviour. China's bank officials readily trust the appearance of wealth. In a nation infatuated with money, appearances count for everything.