by Sean P. Mahoney, Eric S. Yoon
Can and should Sovereign Wealth Funds (SWFs) become bank holding companies in the US?
Actually, under a May, 2012 Federal Reserve Board (FRB) ruling, they have.
The authors analyze this FRB action, which permits the China Investment Corporation, and its subsidiary Central Huijin Investment, to become bank holding companies by acquiring up to 80 percent of the voting shares of The Bank of East Asia (U.S.A.).
The significance of the ruling is in its affirmation that SWF investments in US banking organizations will be analyzed under the same framework applicable to other investors, including full transparency as to ownership structure.