The thrift industry is in a period of many and diverse changes. These changes are occurring on the international level, the national level and the local level.
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.
Activity is picking up within the domestic banking industry, as well. Banks and insurance companies are again selling "soured" real-estate loans and properties after several dry years. Large institutions, including Chase Manhattan and Prudential Life Insurance, are taking advantage of rising prices, competition among buyers and the fact that many have written the assets down to market value. Until recently, some institutions maintained that they would reduce their losses by holding assets t...