U.S. Considered Blacklisting Two Chinese Banks Over North Korea Ties

U.S. officials alarmed by public displays of Pyongyang’s nuclear and missile technology last summer considered taking the provocative step of blacklisting two of China’s biggest banks from the U.S. financial system for doing business with North Korea, three people familiar with the matter said.

But the idea of a U.S. ban was soon shelved, primarily because of fears that punishing lenders of that size might send shock waves through the global financial system, the people said. After conducting an economic impact analysis, officials worried about potential systemic damage and retaliatory measures from China, they explained.