Introduction to Finance

trust receipt 
an instrument 
through which a bank retains title 
to goods until they are paid for
banker’s acceptance 
a promise of 
future payment issued by a fi rm and 
guaranteed by a bank

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C H A PT E R 6 International Finance and Trade
years, foreign banks have held more than one-half of all dollar-denominated banker’s accept-
ances, with most of the remainder held by domestic banks. Nonfi nancial corporations have 
played only a small role as investors in acceptances. Relatively few fi rms deal in banker’s 
acceptances. These dealers arrange nearly simultaneous exchanges of purchases and sales.
Other Aids to International Trade
The Export-Import Bank 
The 
Export-Import Bank
was authorized in 1934 and 
became an independent agency of the government in 1945. The bank’s purpose is to help fi nance 
and facilitate exports and imports between the United States and other countries. It is the only 
U.S. agency engaged solely in fi nancing foreign trade.
The Export-Import Bank is a government-owned corporation with capital of $1 billion in 
nonvoting stock paid in by the U.S. Treasury. It may borrow from the Treasury on a revolving 
basis and sell short-term discount promissory notes. It pays interest on these loans and dividends 
on the capital stock. In performing its function, the bank makes long-term loans to private enter-
prises and governments abroad to fi nance the purchase of U.S. equipment, goods, and services. 
The Export-Import Bank also aids substantially in the economic development of foreign countries 
by giving emergency credits to assist them in maintaining their level of U.S. imports during tem-
porary balance-of-payments diffi
culties. In addition, the bank fi nances or guarantees the payment 
of medium-term commercial export credit extended by exporters and, in partnership with private 
insurance companies, off ers short- and medium-term credit insurance. It lends and guarantees only 
where repayment is reasonably assured and avoids competition with sources of private capital.