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China Ratchets up Restrictions on Foreign Banks

New oversight of bankers’ salaries might make it harder for global banks to attract talent in the country.

By Cathy Chan | June 13, 2022 at 10:31 AM

One after another, the big names in global finance were summoned by Chinese officialdom. On the agenda: pay—specifically, telling Credit Suisse Group AG, Goldman Sachs Group Inc., and UBS Group AG to report details on how they compensate their top bankers.

Don’t reward your top people too lavishly, Chinese regulators warned the banks this year in meetings in Shanghai and Beijing, or you might run afoul of the Communist Party, according to people familiar with the matter. The say-on-pay meetings, reported here for the first time, are just one of the many potholes that global banks have hit lately on their long, rocky road into China. After years of losses or skimpy returns, some of them are reassessing their prospects. Short-term, the outlook isn’t good.

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