Export-import Bank of the United States

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Export-import Bank of the United States

 

(also Eximbank), a government lending agency of the USA.

The bank was founded in 1934 as the Export-Import Bank of Washington to facilitate the financing of foreign trade. The bank granted short-term credits, for a period of up to one year, to help finance exports of agricultural products and other commodities and medium-term credits, for a period of one to five years, to stimulate exports of machinery and equipment. After World War II, the bank was reorganized: its initial authorized capital stock of $175 million was increased to $1 billion, and it was given greater authority to grant credits.

The bank, which received its present name in 1968, grants credits to foreign buyers, guarantees export credits, insures export credits, and discounts export loans issued by American commercial banks. In conjunction with American commercial banks, the bank grants medium- and long-term credits totaling 30–55 percent of the export contract. The bank guarantees the amount of the contract that is financed by the private bank; the credit and guarantee must not exceed 90 percent of the value of the contract.

The bank’s resources come from long-term credits granted by the US Treasury and from the sale of portfolio participation certificates to private entities. The bank’s capital stock of $1 billion and reserve capital of $1.7 billion are used primarily to make up the difference between the interest rates paid and charged by the bank. In 1976 the interest rate charged on bank credits was 8.25–9.5 percent.

The volume of the bank’s operations is restricted by the US Congress, which set a limit of $25 billion on Jan. 4, 1975. As of June 30, 1976, the bank’s loans outstanding totaled $10.8 billion, and obligations in the form of guarantees and the insurance of credits totaled $2.5 billion; 25 percent of the guarantees and credits are included in the bank’s balance. Between 1934 and 1975 the Export-Import Bank of the United States issued credits, guarantees, and insurance policies totaling $82.1 billion.

E. D. ZOLOTARENKO

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