Banking Protectionism Roars On Capitol Hill

Now that the government owns huge stakes in our biggest, it looks like it will inevitably become the worst kind of activist investor.  Everything from trips to Florida resorts to lending decisions have been questioned by lawmakers on Capitol Hill. And now lending to foreign companies is coming under find.

In a hearing on Capitol Hill, members of the House Oversight and Government Reform Committee questioned foreign lending.

“If the banking system is in serious enough trouble to require massive amounts of federal support, shouldn’t that federal support be channeled to the domestic economy?” Rep. Dennis Kucinich, D-Ohio, asked TARP chief Neel Kashkari.

Kucinich highlighted Citigroup’ $8 billion financing arrangement for public authorities in Dubai and Bank of America’s $7 billion investment in the China Construction Bank Corp.

“The kinds of transactions they are doing include billions in loans and investments in other countries at precisely the time that a liquidity shortage has impaired credit markets in the U.S.,” Kucinich said, according to Dow Jones Newswire.

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