2009-11-20

Protectionism is expensive

Block on Minsheng deal costs US $1.7bn
US authorities blocked Minsheng, the Chinese bank, from acquiring a Californian lender in a deal that could have saved almost $300m of taxpayers’ money and $1.4bn from an industry insurance fund, say people familiar with the matter.

Minsheng had asked the Federal Reserve for permission to acquire UCB, a San Francisco bank, but the application was not approved before the struggling US lender had to be seized two weeks ago by the Federal Deposit Insurance Corporation.
The U.S. and China signed a memorandum of understanding to allow increased Chinese investment in U.S. banks, but I'll believe it when I see it.

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