Fed approves two investments by Morgan Stanley

WASHINGTON (Reuters) - The Federal Reserve Board on Friday approved proposals by Morgan Stanley (MS.N) of New York to make noncontrolling investments in two other banks.

Morgan will acquire up to 9.9 percent of the voting shares of Chinatrust Financial Holding Company Ltd. (2891.TW), based in Taiwan, and thereby increase its interest in Chinatrust Bank (U.S.A.) of Torrance, California.

The Fed also said Morgan can retain a 9.9 percent interest in Herald National Bank of New York (HNB.A), which operates only in New York. It said Morgan does not intend to control or exercise a controlling influence over Herald.

Morgan Stanley has total assets of about $626 billion and engages in commercial and investment banking, securities underwriting and dealing in the United States and abroad.

Chinatrust has total assets of $53.9 billion and is the sixth largest bank in Taiwan. Chinatrust Bank operates in four U.S. states and has deposits of about $2 billion.

Herald Bank, which controls deposits of $114.7 million, operates only in New York.

(Reporting by Glenn Somerville; Editing by Kenneth Barry)