Future Of The Export Import Banks Direct Lending Program PDF Download

In this paper, the Futures Group presents an analysis of the criteria employed by the Export-Import Bank of the United States in supporting exports, and of the implications of these criteria and the policies they implement for U.S. trade policy. The analysis concentrates on the direct loan program of the Bank. Unlike the short- and medium-term guarantee and insurance program, direct loans involve an actual extension of credit by the U.S. government. As these loans are usually granted on more favorable terms than those available from private, commercial sources of finance, there is a subsidy involved. The criteria the bank employs in making decisions to support requests for financing are important for several reasons. Although the Bank has maintained that it does not make a conscious choice among industries, there is a de facto choice being made that is inherent in the decisionmaking criteria the Bank employs. As a result of these factors, the criteria employed by the Bank in its direct loan program are more complex, and perform a much more allocative role than in the short- and medium-term programs.