Fraud on the performance of deposit money banks in China

Its impact

  • Cheng Tan The Chinese University of Hong Kong
  • Lee Swan The Chinese University of Hong Kong
Keywords: Reported Fraud Cases, Whistleblowing Policy, Bank Deposit, Management, Fraud


The current study investigated the impact of fraud on the performance of deposit money banks in China between the periods from the past five years. In this study, bank deposit was specified as the dependent variable while the one-period lagged value of bank deposit, amount involved in reported fraud cases, amount lost to fraud and number of staffs involved in fraud cases were used as independent variables. The Generalized Method of Moments (GMM) estimator was employed to analyze the data. This study showed that the amounts involved in fraud cases, amount lost to fraud and number of staffs involved in fraud have a negative and significant influence on the deposit of banks in China. Meanwhile, the past value of bank deposit has a positive and significant relationship with deposit of banks in China. The significance of the past value of bank deposit justifies the introduction of dynamism to this study. It was recommended that bank management should not only strengthen their internal control system, but also utilize whistleblowing policy and other "speak-up" mechanisms, which have remained underused and underrated in the China financial sector, since greater dependence on the process-type fraud detection methods simply encourage complacency.


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How to Cite
Tan, C., & Swan, L. (2020). Fraud on the performance of deposit money banks in China. The International Journal of Social Sciences World (TIJOSSW), 2(01), 1-9. Retrieved from