A special study by the Congressional Budget Office, Budgeting for Eximbank: A Case Study of Credit Reform, finds that the federal budget does not accurately measure the cost of new loans, loan guarantees, and insurance provided by Eximbank. The study examines how credit reform would improve budgeting for Eximbank by separating the subsidy cost of the bank’s credit assistance from its non subsidized cash flows. Eximbank’s loans, guarantees, and insurance cost the government money because the fees it charges do not cover all of its expenses and because the interest rates it charges borrowers are lower than the rates it pays to borrow from the Treasury.
The Export-Import Bank of the United States (Eximbank) provides credit assistance to support the sale abroad of U.S. goods and services. Eximbank makes direct loans to buyers and lenders, supplements some of its loans with grants, and guarantees and insures private export loans. Eximbank’s loans, guarantees, and insurance cost the government money because the bank’s fees do not cover all of its expenses, which include losses on loans that go into default and the cost of administering its programs, and because the interest rates that Eximbank charges are lower than the rates it pays to borrow from the Treasury..
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