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No Issue Untouchable, Ex-Im Bank's Harmon Declares, While Calling For Greater Business Orientation For Bank


Media Contact Name/Phone: 

Marianna Ohe (202) 565-3200

The Council on Foreign Relations and the Institute for International Economics (IIE) have been asked to conduct an independent study of the Export-Import Bank of the United States (Ex-Im Bank) to be presented to the next Administration and Congress, Ex-Im Bank Chairman James A. Harmon announced today. In remarks delivered at an IIE-hosted conference commemorating Ex-Im Bank's 65th anniversary, Harmon said he called for the study on the future of Ex-Im Bank and US trade finance competitiveness to be completed in time for the new Administration.

We must ensure that this Bank's future lives up to its proud history, Harmon said. We need a no-holds-barred audit of Ex-Im Bank, our programs and the competition, a strong business plan — complete with recommendations -- that can be presented to the next President of the United States and to the next Congress on how we can better level the playing field and empower more US businesses to continue growing our economy and creating jobs through exports.

Harmon, who spent 38 years on Wall Street before taking over the leadership of Ex-Im Bank, an independent government agency, said if he were evaluating Ex-Im Bank as a company, I'd express concern that our competition is better structured to face future challenges. I'd be concerned that we operate under laws that hinder our competitiveness and change senior management with every election cycle. These underlying weaknesses barely show up on the radar screen of today's strong economy. But I firmly believe that if we continue to operate in this manner, ultimately we will export fewer US goods and more US jobs.

Stating that he hopes no issue will be 'untouchable,' Harmon said the study should take a hard, fresh look at US sanctions policy. Sanctions flip our exports on and off like a light switch. This erodes our reputation for reliability. I also would like to see a fresh analysis of the Chafee amendment which allows the President or the Secretary of State to stop any export financing transaction. We should examine the whole range of well-intentioned policies to ensure that they continue to serve their goals.

Harmon praised Ex-Im Bank's solid progress over the past three years, including such accomplishments as aiding Russia's transformation to a market economy and helping stabilize Asia and Latin America in the wake of the global financial crisis. But he pointed out that many export credit agencies (ECAs) have much larger budgets than Ex-Im Bank and have invested more in technology, and many countries have completed thorough studies of their ECAs, restructured their export strategies, and are using very sharp tools, like market windows and untied aid.

Noting that on his arrival at Ex-Im Bank, he became its fourth chairman in five years, Harmon said the study should explore this weakness. Maybe my successor should serve a six-year term. ...Regardless of the political landscape, I will offer to the next Administration to remain as chairman until my successor is sworn into office.

The IIE-hosted conference May 15-16 at the Four Seasons Hotel in Washington, D.C., entitled Ex-Im Bank in the 21st Century: A New Approach? is exploring a wide array of options for strengthening Ex-Im Bank. It features presentations by Congressman Jim Leach, Chairman of the House Committee on Banking and Financial Services, Treasury Secretary Lawrence Summers, Commerce Secretary William Daley, and former Treasury Secretary Robert Rubin.

Ex-Im Bank is an independent US government agency that helps finance the sale of US exports, primarily to developing markets throughout the world, by providing loans, guarantees, and export credit insurance. In fiscal year 1999, Ex-Im Bank helped to finance nearly $17 billion of US exports worldwide.