U.S. Banks Hesitant to Lend $20 Billion to Argentina Without Collateral

Major U.S. banks are reluctant to lend $20 billion to Argentina without collateral. The U.S. Treasury is negotiating to set up a debt investment facility, but the absence of collateral could jeopardize the deal. Discussions are ongoing with the possibility of a conflict with the IMF arising.

Major U.S. banks, including JPMorgan Chase, Bank of America, and Goldman Sachs, are expressing hesitation in advancing a $20 billion loan to Argentina due to a lack of guarantees or collateral, the Wall Street Journal reported on Monday.

U.S. Treasury Secretary Scott Bessent is collaborating with banks and investment funds to establish a $20 billion facility aimed at investing in Argentina's sovereign debt. However, without assurance on collateral, the deal remains uncertain as banks await guidance from the Treasury Department on collateral provisions or if Washington would independently backstop the facility.

While discussions continue, the unresolved issue of collateral could prevent finalization. An additional $20 billion agreement was signed between Argentina's central bank and the U.S. Treasury, raising potential conflicts with the IMF regarding prioritization of U.S. liabilities over IMF loans.