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Mr. CORKER. Mr. President, I will be very brief. Again, this amendment is very simple and it does two things I would think the Senator from Washington especially would support, after all we have gone through, and especially after her alluding to some of the most recent developments in the financial system. I hope this amendment will receive broad support in this body.
The Ex-Im Bank is set up to finance transactions that cannot be financed in the private sector. That is the purpose for its existence. So, No. 1, what this amendment will do is to cause the Ex-Im Bank to certify there is no private sector financing--or at least no private sector financing at a reasonable cost--before any loan goes through the Ex-Im Bank.
The second piece I think is very important. The way the Ex-Im Bank is set up right now, there are no capital requirements. The Senator from Washington was just talking about something that happened at JPMorgan. Fortunately, we have put in place since the financial crisis very strong capital requirements at our financial institutions, and what that has done is to make them healthy and to cause them to be able to withstand things that may happen as relates to default rates or other failures.
The Ex-Im Bank, believe it or not, is set up to finance things that no other bank will finance, and yet it has no capital requirements other than having to maintain $1 billion. So they are able to loan, per this new legislation, $140 billion but they only have to have $1 billion in capital reserves, which means you are creating with this mechanism 140-to-1 leverage ratios.
What we have gone through with our entire financial system is a process to make sure we have adequate capital. What our amendment does is to require that the Ex-Im Bank adhere to the normal sound financial practices we want our financial institutions across our country to adhere to by establishing a 10-percent capital base.
Again, I think this is a very goodgovernment amendment. We don't want to see the same happen with Ex-Im Bank that we have seen happen with Fannie, with Freddie, with so many of our institutions in this country that did not have proper capital reserves.
I urge strong support for this amendment which will make the Ex-Im Bank something that ensures--or hopefully helps ensure--that our U.S. taxpayers are never in a situation where we have to come to the aid of this institution because it hasn't reserved properly, it doesn't have the proper capital standards in place, that I think people in
this body on both sides of the aisle have overwhelmingly supported for the private sector.
I would hate to see us be in a situation where we want to create something in government that risks taxpayers' money, when we have just gone through a process of understanding that it is very important for the financial institutions of our country to have appropriate capital standards. Here we are getting ready to pass legislation on this floor which, I am sorry, has almost no capital standards in place because you only have to have $1 billion--that is all--at the Ex-Im Bank, $1 billion against a $140 billion loan base. I think anybody here thinking about this understands those standards are not nearly appropriate, and I hope this amendment will receive overwhelming support.
It is my sense that if we pass this, the House would easily pass this. Contrary to what the Senator from Washington was saying, I think this would make the legislation better and, my sense is, receive overwhelming support in the House if added to it.
I yield the floor, and I thank the Senator from South Carolina for his tremendous courtesy.
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