> Foreign banks must report all financial activities of Americans to the US. An American official wad asked in an interview if the US would then report

The U.S. predominantly compels banks through FATCA. If a bank wants to do business in America, it has to follow FATCA for Americans abroad. There is, of course, some regulatory co-operation. But to my knowledge, most countries don't directly transmit these data to the U.S.–the banks have to report it instead.

The correct analogy would be a foreign country requiring U.S. banks to send them data on their own citizens abroad. Which, I think, e.g. India could probably do.