U.S. lawmakers pile pressure on big banks over China ties, Taiwan

High U.S. bankers got here underneath stress from lawmakers on Wednesday to take a harder stance on doing enterprise with China amid rising tensions between Washington and Beijing over Taiwan’s sovereignty and China’s human rights report.

Throughout a listening to earlier than the U.S. Home Monetary Companies Committee, Republican congressman Blaine Luetkemeyer pressed financial institution chief executives on how they’d reply within the hypothetical occasion of a Chinese language invasion of Taiwan.

Lawmakers additionally requested the CEOs to sentence China’s “human rights abuses,” in a departure from earlier hearings that tended to concentrate on home points like housing and client safety.

“We’ll comply with the federal government’s steerage, which has been for many years to work with China,” stated Financial institution of America Chief Govt Officer Brian Moynihan. “If they alter that place, we are going to instantly change it, as we did in Russia.”

JPMorgan & Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser each concurred, saying their banks would comply with authorities steerage if China had been to invade Taiwan.

Financial institution of America Chairman and CEO Brian Moynihan testifies throughout a U.S. Home Monetary Companies Committee listening to titled “Holding Megabanks Accountable: Oversight of America’s Largest Shopper Dealing with Banks” on Capitol Hill in Washington, U.S., September 21, 2022. (REUTERS)

The elevated scrutiny underscores the challenges the nation’s largest lenders more and more face as they attempt to stability industrial pursuits with stress from policymakers, activists and buyers to take stances on environmental, social and governance points.

Wall Road giants together with JPMorgan, Goldman Sachs Group Inc and Morgan Stanley have sought in recent times to broaden their companies in China, the world’s second-largest financial system. Authorities there have granted U.S. banks extra possession of their securities companies regardless of rising geopolitical stress and financial competitors between the 2 nations.

JPMorgan, which has been in China since 1921, serves Chinese language and worldwide companies, monetary establishments and authorities companies. Final yr it grew to become the primary international agency to completely personal a securities enterprise in China.

Citigroup, which was the primary U.S. financial institution to arrange store in China in 1902, final yr utilized for a mainland Chinese language securities license as a part of its push to ramp up enterprise available in the market.

China has been finishing up navy drills close to Taiwan in current weeks. After U.S. Home Speaker Nancy Pelosi visited Taipei, China fired missiles into waters close to the island, although its actions have since scaled again.

China claims democratically dominated Taiwan as its personal territory. Taiwan’s authorities rejects China’s sovereignty claims.

Congressman Luetkemeyer requested Fraser what Citigroup would do if a conflict over Taiwan broke out.

“It’s a hypothetical query,” Fraser stated. “It’s extremely seemingly that we are going to have a lowered presence.” Citigroup has a worldwide attain that spans greater than 160 nations.

When requested later by Republican Lance Gooden if she would condemn “ongoing human rights abuses in China,” Fraser hesitated. “Condemn is a robust phrase,” she stated. “We definitely are very distressed to see it.”

JPMorgan’s Dimon additionally warned the USA needed to compete with world Chinese language banks, which have grown in measurement over the previous couple of years to grow to be the largest on the planet.

“I’m going to do the whole lot in my energy to verify we compete with the most effective Chinese language banks on the planet. It is rather essential for the way forward for America that America maintains its monetary supremacy similar to anything.”

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