The FRB has approved several applications from banks controlled by the Chinese government, most significantly that of the Industrial and Commercial Bank of China, Ltd. (ICBG) to, in concert with several affiliated Chinese banks, become BHCs to acquire the Bank of East Asia (USA) or BEA-USA, a national bank. Although the FRB has in the past imposed few limits on state-controlled banking organizations, these applications raise policy and political questions due to longstanding U.S.-China relationship issues and ongoing concern about the rigor of bank supervision in that nation. However, the FRB approved the transactions on grounds that recent reforms have significantly alleviated prudential and capital concerns and that ongoing supervision will ensure future safe-and-sound U.S. operations.
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