U.S. Banks Underwrite China IPOs Amid National Security Scrutiny

The underwriting of China-linked IPOs, exemplified by Contemporary Amperex Technology Co. Ltd. (CATL)'s 2025 Hong Kong IPO, has sparked significant debate over U.S. national security versus financial gain, with major U.S. banks like JPMorgan Chase and Bank of America facing criticism for facilitating the deal despite CATL's military ties and connections to sanctioned entities. Meanwhile, the U.S. government's shift toward real-time sanctions enforcement in maritime Iranian oil trade has increased risks and costs for banks and traders, as cargoes can be targeted mid-voyage, leading to substantial financial losses and complex legal challenges. Additionally, geopolitical tensions and shifting U.S. commercial policies contribute to global financial uncertainty, as highlighted by concerns from Romania's National Bank about deteriorating macroeconomic balances and systemic risks exacerbated by these policies. Reflecting these broader anxieties, accountants worldwide now rank geopolitics as their top risk, with internal vulnerabilities such as governance gaps and workforce strain compounding concerns amid changing trade policies, particularly in North America and Asia Pacific. The case of Chenyue Mao, a U.S. citizen and Wells Fargo executive barred from leaving China, illustrates the growing legal and geopolitical challenges multinational banks face in China, prompting operational adjustments and eroding investor confidence amid escalating cross-border tensions. Together, these developments underscore how increasing geopolitical and regulatory complexities are reshaping risk assessments and strategic decisions for global financial institutions.