Remember the Export-Import Bank

(Eakinomics, Washington, 17 January 2019) The Export-Import Bank is due to be re-authorized in September 2019. The re-authorization of Ex-Im in 2015 became a pitched battle over whether it was an appropriate role for the government. While the arguments against market intervention make sense, until other countries scale back their use of ECAs, the Ex-Im Bank is a necessary evil to level the playing field. The decline in Ex-Im activity is clear in the graph (below)... there are about $30 billion in ECA activity in the G-7 and $50 billion among the BRIC countries. The bank is unable to approve any transactions greater than $10 million in value because it has not had a quorum of 3 voting board members since 2015. Given the lack of a quorum, as of Summer 2018, there are $43 billion in transactions awaiting approval. The administration resubmitted the nomination of Kimberly Reed to be president of the Ex-Im Bank and for Spencer Bachus III, Judith DelZoppo Pryor and Claudia Slacik to serve on its board of directors. All had been previously nominated by the administration, and the Senate Banking Committee had favorably reported them, but the full Senate did not take up their nominations.