The Export-Import Bank will almost surely close at the end of the month, as an unlikely alliance of conservative Republicans and liberal Democrats in Congress are unwilling to provide the re-authorization required for the bank by then.
Opponents say the bank is a boondogle for big corporations like Boeing, while supporters argue it is essential for supporting U.S. exports.
"Supporters are beginning to throw up their hands and admit that the agency is very likely to lose its charter," write
Politico reporters Burgess Everett and Manu Raju.
Some moderates are upset about opposition. "The fact that you would let the bank expire because of some ideological jihad, . . . I'm not going to be part of it," South Carolina GOP Sen. Lindsey Graham, a presidential candidate, said last month.
But fellow presidential candidate Sen. Ted Cruz, R-Texas, feels a bit differently. "It would be a reckless gamble if this body were to try to hold our national defense hostage in an effort to force through an extension of crony capitalism," he said referring to an effort to add bank authorization to a defense policy bill.
When it comes to the private banking sector, though bank loans to businesses rose 8.5 percent in the first quarter, the overall lending trend for the country's four largest banks is worrisome, say Martin Baily and Sarah Holmes, economists at the Brookings Institution.
The big four are JPMorgan Chase, Citigroup, Bank of America and Wells Fargo.
"Since 2010, the share of banking sector assets held by the Big Four has declined. This trend is likely to continue in light of regulatory pressure and capital requirements,"
Baily and Holmes write in an article for Real Clear Markets.
It's difficult to predict the impact of that development on the economy and banking industry.
"However, our research shows a troubling decline in loans in relation to deposits, meaning banks have the ability to make loans but aren't — either due to concerns about risk, or they may be restrained from lending by regulatory pressures," the duo states.
The economy needs a healthy loan market of course. "The markets froze during the crisis due to fear, but was expected to increase as the economy recovered," the economists explain. "That doesn't seem to be happening as much as our economy needs."
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