Skip to comments.Federal Reserve allows Chinese-controlled banks to take stakes in US banks
Posted on 05/10/2012 1:28:42 PM PDT by bruinbirdman
The Federal Reserve has approved applications by three big Chinese government-controlled banks to set up branches and take stakes in US banks after deciding they were adequately regulated in their home market.
The US central bank said Industrial and Commercial Bank of China (ICBC), the biggest bank in China and 70.7pc owned by the government of China, will become a bank holding company.
In addition, China Investment Corporation (CIC), an investment vehicle set up by the Chinese government to invest its massive foreign exchange reserves, and another company that CIC controls called Huijin Investment will be allowed to become bank holdings companies.
They will become holding companies by taking control of The Bank of East Asia in New York, the first time a Chinese bank has been approved to acquire a US bank.
ICBC has total assets worth an estimated $2.5 trillion.
Karen Petrou, a banking analyst with Washington Research Group, said that by becoming bank holding companies, the Chinese firms will be "ring-fenced" from their home country supervisors and will be subject to US law and supervision.
The announcement comes days after the annual Strategic and Economic Dialogue talks in Beijing where US officials said China agreed to raise foreign ownership limits in domestic joint venture firms that trade in commodity and financial futures.
The Fed decision said it had concluded that ICBC was subject to comprehensive, consolidated supervision by Chinese regulators, a finding that was necessary before Chinese banks could be permitted to take US deposits or own US banks.
China has amassed huge foreign exchange reserves, largely in the form of US dollars, through the persistent annual surpluses that it runs up on bilateral trade with the US.
Petrou noted that the fact CIC invests those reserves for China may have made the proposal for it to
(Excerpt) Read more at telegraph.co.uk ...
The NOT SO Federal Reserve allows Chinese-controlled banks to take stakes in US banks
There, fixed it.
Just when I think the Obama administration has reached the Zenith of idiocy they do something like this.
Frequent contributors to the Obama re-election campaign of $25 or less.
Good God Gertrude...when will this nightmare end?
Oh, dear, this is alarming.
We’ve got to get Obama out of government ASAP.
So, is China going to be the one who bails out and takes over JPMorgan Chase after they’ve finally disclosed $2 billion loss?