Critics of the Export-Import Bank Have a New Weapon at Their Disposal: Fair-Value Accounting

Some lawmakers have questioned whether the Export-Import Bank should still be wading so heavily into private markets – effectively picking winners and losers with its loans and loan guarantees. Defenders of the bank argue that the programs simultaneously help create domestic jobs and level the playing field with international competitors. Another key argument for supporters is that not only does the bank serve those ends at no cost to taxpayers, but it actually earns a profit. The problem with that last claim – which lawmakers to date have not focused in on – is that the Export-Import Bank’s profits are almost surely an accounting illusion. The non-partisan Congressional Budget Office has cautioned policymakers that the government’s official accounting rules effectively force budget analysts to understate the cost of loan programs like those managed by the Export-Import Bank.

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