Top US bank CEOs warn they can stop working with China if Taiwan is invaded
Top US bank chief executives have said they will stop working with China if they are instructed to do so by the Joe Biden administration in the event of Taiwan being invaded.
The remarks were made at a wide-ranging hearing before the House of Representatives’s Financial Services Committee on Wednesday.
The line-up included chief executives of the country's four largest banks: JPMorgan Chase & Co’s Jamie Dimon, Wells Fargo’s Charles Scharf, Bank of America’s Brian Moynihan and Citigroup’s Jane Fraser.
CEOs of the largest regional lenders - US Bancorp, PNC Financial and Truist were also present at the hearing.
Blaine Luetkemeyer, the Republican congressman supportive of the industry, questioned Mr Dimon, Mr Moynihan and Ms Fraser on how they would respond if China attacked Taiwan.
They responded by saying that in light of such an event they would do as the US government instructed.
“We will follow the government’s guidance which has been for decades to work with China. If they change the position, we will immediately change it as we did in Russia,” Mr Moynihan said.
Mr Biden earlier this week reiterated that US troops would come to Taiwan’s defence in the event of an attack by mainland China, triggering heavy criticism from Beijing.
Ms Fraser, however, struggled to respond when asked by Republican Lance Gooden if she would condemn “ongoing human rights abuses in China”.
“Condemn is a strong word,” she said. “We certainly are very distressed to see it.”
Although such hearings rarely translate into legislative action, there are substantial risks involved for the chief executives, who were forced to defend their banks amid geopolitical rows with Russia and China.
Bank of America's chief executive warned long-term competitiveness of China’s banks was the “real issue” for concern. “They could acquire any of us without much problem, in terms of financial resources.”
Mr Dimon and Ms Fraser were additionally questioned by California congressman Brad Sherman about their Russian clients.
The CEOs also endorsed the US Federal Reserve rate hikes in an effort to tame soaring inflation. The central bank had announced on Wednesday afternoon that it was raising rates again by 75 basis points.
Mr Moynihan and Mr Dimon said interest rate hikes were necessary to get a grip on inflation even as consumers continue to be in good shape.
With rising interest rates, Ms Fraser stressed that she expected people with lower credit scores to experience greater financial stress.
Savings rates, which soared during the pandemic months would decline, she said, adding: “We’re going to be in for tougher times ahead.”