Jul 08, 2015

Private Financiers Are Already Filling the Ex-Im Bank Void

Post by Freedom Partners

Arlington, VA — Supporters of the Export-Import Bank warned that many U.S. exports couldn’t survive without the bank. Now, only one week after expiration, private financiers are already stepping in to fill the void.

With all U.S. exporters now on a level playing field and the Ex-Im Bank no longer undermining private financing, lawmakers should reconsider Ex-Im supporters’ misleading rhetoric. It’s clear that Ex-Im is not a “lender of last resort.” Private financing is available for worthwhile ventures, and companies are already taking advantage of it.


Freedom Partners Senior Policy Advisor Andy Koenig issued the following statement:

“As economists and financial analysts predicted, the private sector is stepping in to fill Ex-Im’s void. From day one, Ex-Im supporters have staked its existence on the claim that the private market would not meet the demand for export financing. We now know that’s not the case. Thanks to lawmakers taking a stand against corporate welfare, American exporters are now competing on a level playing field, and that is good for America’s economy.”

Private Market Stepping In To Fill The Void Since Ex-Im’s Expiration

Warren Distribution Has Been Able To Go To The Private Market For Insurance Since July 1. “Lawmakers could reinstate the bank’s charter this month, but until then, companies like Warren Distribution, the Omaha manufacturer that used the bank to insure its shipments, have to go elsewhere. (Warren’s international business is now big enough that it’s able to go to the private market for insurance; it has done so since July 1.)” (Cole Epley, “Area Companies Anxiously Watch Future Of Export-Import Bank,” Omaha World-Herald, 07/08/15)

Lindsay Corp. Has Also Shifted To The Private Market For Insurance Since Ex-Im Expired. “Other Ex-Im beneficiaries in Nebraska include Lindsay Corp. … Like Warren’s Hushka, Lindsay Chief Financial Officer Jim Raabe said his company has recently shifted to the private market for its insurance.” (Cole Epley, “Area Companies Anxiously Watch Future Of Export-Import Bank,” Omaha World-Herald, 07/08/15)

Flashback: “Ex-Im Bank Does Not Compete With Private Sector Lenders, But Rather Provides Financing For Transactions That Would Otherwise Not Take Place.”

Ex-Im President Fred Hochberg: “Ex-Im Bank Does Not Compete With Private Sector Lenders, But Rather Provides Financing For Transactions That Would Otherwise Not Take Place.” “We assume commercial, country, and liquidity risks that are reasonable and responsible, but currently beyond the still-recovering appetite of private lenders. Ex-Im Bank does not compete with private sector lenders, but rather provides financing for transactions that would otherwise not take place because commercial lenders are either unable or unwilling to accept the political or commercial risk inherent in the deal.” (Fred P. Hochberg, “Chairman Hochberg’s Statement To Senate Banking Committee On Ex-Im Bank’s Oversight And Reauthorization,” Export-Import Bank of the United States, 01/28/14)

Ex-Im Inspector General: “Given Ex-Im Bank’s Position As A ‘Lender Of Last Resort’, Its Authorizations Have Grown In Record Numbers To Support U.S. Exports As Private Lending Has Contracted Or Plateaued.” (“Semiannual Report To Congress: October 1, 2012 To March 31, 2013,” Office of Inspector General, 2013)

U.S. Chamber Of Commerce And National Association Of Manufacturers: “Without Ex-Im Bank Acting As A ‘Lender Of Last Resort’ To Fill Market Gaps, Many Foreign Customers May Turn To Non-U.S. Suppliers.” “The group, along with the U.S. Chamber of Commerce, the National Assn. of Manufacturers and eight other business trade associations wrote to congressional leaders last week urging them to move quickly to provide a long-term extension of the bank’s charter. ‘Without Ex-Im Bank acting as a ‘lender of last resort’ to fill market gaps, many foreign customers may turn to non-U.S. suppliers that already have significant support from their own official export credit agencies,’ the groups wrote.” (Jim Puzzanghera, “Export-Import Bank Supporters Relieved, Worried By 9-Month Extension,” Los Angeles Times, 09/19/14)