Leaders of the nation’s largest banks came under scrutiny Wednesday as lawmakers sought to assert a tougher posture towards China’s communist government.
During the hearing of the U.S. House Financial Services Committee, Rep. Blaine Luetkemeyer (R-Mo.) asked bank executives how their organizations would respond to an invasion of Taiwan by the CCP.
“We will follow the government’s guidance, which has been for decades to work with China,” said Bank of America CEO Brian Moynihan.
“If they change that position, we will immediately change it, as we did in Russia.”
CEOs from JPMorgan Chase and Citigroup agreed with Moynihan’s statement and said that their organizations would follow government direction should it change.
The heightened scrutiny underscored the challenges facing the nation’s largest financial institutions in an era characterized by great power competition and increased activist pressure to address societal woes.
It also underscored the longstanding business interests that the banks had in China and the fragility of their presence there.
Both Citigroup and JPMorgan have operated in China for longer than the CCP has existed, with Citigroup establishing a presence there in 1902 and JPMorgan in 1921. The CCP, formed in 1921, did not secure power over the nation until 1949.
Since then, relations between China and Taiwan have been fraught, as both sides claim to be the legitimate heirs to the the island.
Recent antagonisms between the CCP, Taiwan, and the United States over the continued de facto independence of Taiwan have only increased this tension, and raised fears that the CCP could launch a military invasion of the island.
Such would present an enormous problem to the Wall Street giants which, in recent years, have sought to expand their businesses in China even as CCP leadership has sought to assert an unprecedented control over the economy.
To that end, Luetkemeyer asked Citigroup CEO Jane Fraser what Citigroup would do if a war over Taiwan broke out.
“It’s a hypothetical question,” Fraser said. “It’s highly likely that we will have a reduced presence.”
Asked later by Rep. Lance Gooden (R-Texas) if she would condemn the myriad ongoing human rights abuses in China, Fraser hesitated, perhaps indicating the trepidation of so many corporations to anger the CCP.
“Condemn is a strong word,” she said. “We certainly are very distressed to see it.”
Reuters contributed to this report