DelhiDesk: Major banks and financial regulators in the US are preparing for a possible default on US debt, including holding meetings and setting up war rooms to plan for quick relief. Talks between President Joe Biden and Republican lawmakers on raising the $3.14 trillion debt ceiling have so far been unsuccessful. Without an increase in the debt ceiling, the US cannot borrow more money to finance its bills, which have already been approved by Congress. Economists warn that financial chaos could occur, leading to a steep rise in the cost of borrowing for companies and consumers, and a serious and long-lasting global economic recession.
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👉 Houston: The biggest banks and financial regulators are preparing for a possible default on US debt.
👉 Bank of America CEO Brian Moynihan said the plan to deal with the crisis was a response to the lack of progress in talks between President Joe Biden and Republican lawmakers on raising the $3.14 trillion debt ceiling.
👉 Without an increase in the debt ceiling, the US cannot borrow more money to finance its bills.
👉 Economists generally expect financial chaos as access to credit shrinks and a steep rise in the cost of borrowing for companies and consumers.
👉 Jamie Dimon, who runs America’s largest bank JPMorgan Chase, is calling a weekly war room to discuss the possible default and how the bank should deal.
👉 All debt in the US is called Treasury Bills or Bonds, and in the event of a default, the value of treasuries is likely to decline, which can further weaken the bank’s balance sheet.
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