The Thrift Industry

On the international level, thrift institutions such as the American Export-Import Bank are again taking an active role in lending to the international marketplace. In the case of the Export-Import Bank, the thrift is taking an active role in financing growth in the global infrastructure market. The bank is financing large projects, such as power stations, industrial plants and airports, especially in Asia, where there is pressure to build infrastructure without adding debt. By using equity financing, the projects essentially remain off the balance sheet (Lachica n.p.).

American banks are also resuming loans to Mexico, a practice that declined during the late 1980s after loans to Mexico and South American came under increased scrutiny. J.P. Morgan and two other banks (Bank of America and Industrial Bank of Japan, Ltd.) recently organized a $1.1 billion loan to Mexico's state-owned oil company. This represents a significant departure from the banking industry's reluctance to participate in Mexico since 1982, when the country defaulted on a number of loans totaling more than $80 billion from foreign banks (Torres A3). This syndicated loan package also represents an investment in the infrastructure of Mexico since the oil industry is a crucial component of the Mexican economy.

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994), n.p. ---. "Met Life Agents' Sales Practices Called Deceptive." Wall Street Journal (March 10, 1994): n.p. ---. "Met Life Agrees to Pay $20 Million Fine To Settle Accusations Over Sales Tactics." Wall Street Journal (March 8, 1994): A4. ---. "Ohio Probing Whether Met Life Violated Regulations in Winning Insurance Pact." Wall Street Journal (February 7, 1994): n.p. Wartzman, Rick. "Health-Care and Insurance Industries Contributed Generously to Cooper in '93." Wall Street Journal (February 7, 1994): n.p. Ybarra, Michael J. "Two California Pension Funds Launch Initiative to Build Affordable Housing." Wall Street Journal (March 15, 1994): n.p. The Federal Reserve has the power to set interest rates for key areas, including the discount rate and the federal funds rate. In February 1994, the Fed increased the federal funds rate (the overnight rate at which banks borrow money from each other) from 3.0 percent to 3.25 percent. This marked the first increase in the federal funds rate in more than five years. The New York Stock Exchange lost nearly 2.5 percent of its value at the time the increase was announced, although analysts considered that the market would rebound as the economy reacts through increased
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Approximate Word count = 5127
Approximate Pages = 21 (250 words per page)

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