Morgan Stanley, Citi vying to clear yuan trades in U.S.: executive
(This October 19 story makes clear in paragraph 3 that Xu is head of Bank of China in New York)
NEW YORK (Reuters) - Morgan Stanley and Citigroup Inc are among those vying to be the designated U.S. bank clearing yuan trades in the United States alongside Bank of China Ltd (BoC), China's fourth-biggest bank by assets, a senior BoC executive said on Wednesday.
Appointing banks to clear yuan CNY=CFXS trades is part of China's drive to encourage worldwide use of the currency, also known as the renminbi, which it hopes would some day supplement or rival the dollar as a global reserve currency.
Unlike other countries where China is also trying to expand the yuan's reach, the United States will have two banks to clear renminbi trades, said Xu Chen, president and chief executive officer of BoC's 3988.HK (601988.SS: Quote) New York office.
This is in part because the advocacy group led by former New York mayor Michael Bloomberg that has championed wider usage of the yuan in the United States had asked China to allow a U.S. bank to clear renminbi trades in the country, Chen said.
China usually designates just one Chinese bank to clear all yuan trades in each country outside its borders.
"Based on our understanding, the (advocacy) group suggested to the People's Bank of China (PBOC) that it adopts the approach of appointing one Chinese bank and one U.S. bank," he said.
The sheer volume of trade should help catapult the United States into the second-largest offshore yuan clearing centre after Hong Kong in three to five years, Chen said. Continued...