Congress Questions Major U.S. Banks’ China Stance
- September 22, 2022
- Posted by: Quatro Strategies
- Category: Politics
The U.S. House Financial Services Committee held a hearing on Wednesday to question top U.S. bankers’ stance on China. The lawmakers mounted pressure on banks to take a tougher stance on doing business with China amid growing tensions between Washington and Beijing over Taiwan and China’s human rights record. During the hearing, lawmakers asked the banks what position they would take in the event of a Chinese invasion of Taiwan.
Lawmakers also asked the bank CEOs to condemn China’s “human rights abuses,” in a departure from previous hearings that tended to focus on domestic issues like housing and consumer protection. Bank of America CEO Moynihan said they would follow the government’s guidance as they did for decades regarding business with China. He added that if government changes its China position, they would immediately change it as well, as they did it in Russia.
Both JPMorgan and Citigroup CEOs concurred, saying they would follow government guidance if China were to invade Taiwan.
The U.S.’ largest lenders have been increasingly scrutinized as they try to balance commercial interests with pressure from policymakers, activists and investors to take stances on environmental, social and governance issues.
Still, Wall Street majors including JPMorgan, Goldman Sachs and Morgan Stanley have sought in recent years to expand their businesses in China. Authorities there have granted U.S. banks more ownership of their securities businesses despite rising geopolitical tension and economic competition between the two nations.
JPMorgan, which has been in China since 1921, serves Chinese and international corporations, financial institutions and government agencies. Last year it became the first foreign firm to fully own a securities venture in China.
Citigroup, which was the first U.S. bank to establish business in China in 1902, last year applied for a mainland Chinese securities license as part of its push to ramp up business in the market.
China has been carrying out military exercises near Taiwan since U.S. House Speaker Pelosi visited the island in early August, although the intensity of the drills have been scaled back recently.
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