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US Authorizes Chinese Bank to Open Branch in New York


U.S. officials have authorized China's second-largest bank to open its first branch in the United States.

The Federal Reserve - the U.S. central bank - on Monday approved an application by China Construction Bank to set up a branch in New York city. The Federal Reserve issued a statement saying the branch is expected to offer wholesale deposit-taking, lending, trade finance and other banking services.

The statement said the bank holds reserves of over $1 trillion and operates branches in several foreign countries in Asia and Europe. The Chinese government owns 57 percent of the bank's shares, while U.S.-based Bank of America owns about 19 percent. A sovereign wealth fund owned by the government of Singapore owns nearly six percent.

U.S. officials judged the bank to possess sufficient capital reserves to meet international standards. They also approved steps taken by the bank and the Chinese government to combat money-laundering.

China Construction bank also is subject to additional regulation required for listing on the Shanghai and Hong Kong stock exchanges.

The Chinese government also has a majority interest in two other Chinese banks - the Bank of China and the Industrial and Commercial Bank of China - each of which has branches in the United States.

U.S. regulators said Bank of America must seek approval from the Federal Reserve to retain shares in China Construction Bank after it opens its New York branch.

Some information for this report was provided by AFP and Reuters.

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