chapter  3
21 Pages

The Lending Motives of U.S. Banks

WithRaúl L. Madrid

The banks’ marketing efforts principally consisted of identifying and gathering information on potential borrowers and keeping them aware of the banks’ services. By the mid-1970s, both banks had more than a dozen offices in the developing world. The offices allowed the banks to be in constant contact with the key authorities in the nations, enabling the banks to monitor developments in individual countries and anticipate their financing needs. The advantages offered by offices led a number of the larger regional banks to follow the lead of the money center banks and establish some sort of physical presence in the major developing countries during the 1970s. The mid-sized regional banks competed passionately to make smaller, primarily trade-related financings to Third World borrowers. Profit was the primary motive behind the decisions of US banks to enter the Third World lending business on a massive scale.