The Federal Reserve said Wednesday it approved the expansion of the U.S. operations of three of China's largest banks, including the first acquisition of a U.S. bank by a Chinese bank.
The Fed said it had approved applications from the Bank of China and Agricultural Bank of China to establish new branches. The central bank also approved an application by China's largest bank, Industrial & Commercial Bank of China, to become a bank holding company through the acquisition of up to 80% of the U.S. operations of Bank of East Asia.
The Fed's move comes after high-level U.S.-China Strategic and Economic Dialogue negotiations last week in Beijing. Asked about reports in Chinese media that the U.S. had promised it would help Chinese banks gain better entry into the U.S. market, Treasury Under Secretary for International Affairs Lael Brainard on Tuesday said the Fed's application process is "independent" of the administration's policies.
State-owned China Investment and Central Huijin Investment also received approval to be bank holding companies as part of the Industrial & Commercial Bank deal.
The five Fed board members voted unanimously in favor of each of the applications, which come from the largest and third- and fourth-largest banks in China. All of the banks are at least 70% owned by the Chinese government and had at least $1.85 trillion in assets at the end of last year.