@Chip and PIN is not to prevent fraud people...
It seems to be said a lot here that the Chip and PIN system wasn't put in place to prevent fraud, rather that is was put in place to shift responsibillity for fraud onto the customer. I really don't buy this there are precious few, if any, reliable/serious people claiming fraud on their cards. In the only time it's gone to court that I am aware of, the person claiming fraudulant use of the card was shown to be a highly unreliable witness.
The main thing that people seem to be overlooking is that there is a banking regulator, one of the main reasons that the regulator is in place is to prevent the banks getting too much power over their customers and imposing unfair conditions. The regulator hasn't performed too well over the last couple of years, with respect to how the banks behave internally wrt trading etc, but this was because they were focusing too much on how customers are treated. If the banks were operating in a way which forced liability onto their customers the regulator would not allow it.
In this case there does seem to be a problem with chip and pin, but chip and pin is not fixed in stone, it can be modified to work around problems. One of Ross Anderson's previous papers (cited in this one) showed how to run a man in the middle/relay attack, this was made unworkable an a matter of weeks with an update to the chip and pin protocol.