Government Trade Bank Cuts Loss
The federal government’s Export-Import Bank has reported that it reduced both its losses and the U.S. exports it supported in the year that ended last Sept. 30.
The bank’s annual report, released Saturday, included renewed criticism from Comptroller General Charles A. Bowsher, head of the congressional General Accounting Office. He said the bank has failed to make any allowance for what his office considers the uncollectible portion of $11.6 billion owed to it. The statement did not say how much was considered uncollectible.
Bowsher’s staff has cited old loans counted by the bank as assets even though they have been repudiated by China and Cuba.
Bowsher wrote that because of its continued losses, the bank’s reserve was in deficit for the first time ever. The bank put that deficit at $116.4 million.
“The bank is extremely cautious about writing off loans and guarantees to government(s) . . . because we believe these sovereign risk loans and guarantees will be repaid,” said a statement in the report by Acting President William F. Ryan and James K. Hess, the bank’s treasurer.
A separate report by the bank on its international competitiveness said American business people judged it “generally less than competitive” with other industrial governments in making five-year loans. It was seen as competitive for shorter-term loans.
It supported long-term credit for about $710 million worth of business in 1988, compared to $5.37 billion supported by France, $1.77 billion by Italy, $1.13 billion by West Germany and $730 million by Britain.
The bank’s major job in recent years has been to encourage sales of American industrial goods by helping foreign buyers borrow the money needed to purchase them. It makes direct loans and guarantees loans by commercial banks so that they can offer lower interest. Other governments have similar agencies for supporting their exports.
It supported $6.535 billion worth of sales in 1988, compared to $9.265 billion the year before. It cut its net loss to $428.2 million from the previous year’s $460.9 million. It has been losing money through the 1980s.
