Bear Stearns, one of the several institutions hardest hit by the US subprime mortgage crisis, said earlier this month it would consider selling a stake to an investor from China or the Middle East if the deal created value.

Jiang Dingzhi, vice-chairman of the China Banking Regulatory Commission, cited CITIC Bank''s interest in buying into Bear Stearns as he listed Chinese banks'' acquisitions and investments in overseas financial institutions.

"The foreign M&A of our banks is entering a new era and the pace of internationalisation is accelerating," Jiang said at a financial forum during the five-yearly Congress of the ruling Communist Party.

Bear Stearns has been looking to expand its overseas focus, and a tie-up with CITIC, China''s seventh-largest lender, could give it a big boost in the world''s fourth-biggest economy.

CITIC Bank raised $5.4 billion in a Hong Kong and Shanghai initial public offering in April.

Shares in Bear Stearns have dropped more than a quarter this year and trade at 1.18 times book value.