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Bank CEOs warn "grave" consequences if no debt deal

Storm clouds gather above the Capitol in Washington July 11, 2011. REUTERS/Jonathan Ernst

Storm clouds gather above the Capitol in Washington July 11, 2011.

Credit: Reuters/Jonathan Ernst

WASHINGTON | Thu Jul 28, 2011 10:32am EDT

WASHINGTON (Reuters) - Chief executives from the nation's largest financial firms on Thursday pressured the White House and Congress to reach a deal on the debt ceiling and deficit reduction, saying the consequences of inaction "would be very grave."

JPMorgan's Jamie Dimon, Goldman Sachs' Lloyd Blankfein and Bank of America's Brian Moynihan, among others, said in a letter that an agreement needs to be reached this week.

"A default on our nation's obligations, or a downgrade of America's credit rating, would be a tremendous blow to business and investor confidence -- raising interest rates for everyone who borrows, undermining the value of the dollar, and roiling stock and bond markets -- and, therefore, dramatically worsening our nation's already difficult economic circumstances," the letter said.

(Reporting by Dave Clarke and Rachelle Younglai; Editing by Derek Caney)
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Comments (12)
SeaWa wrote:
I truly want the treasury to stop payment on all congress compensation, reimbursements, benefits, etc if they can’t work out the debt and we go into a default on any obligations. If we cannot meet our financial obligations then certainly we cannot afford to pay congress. Make them understand this.

Jul 28, 2011 11:04am EDT  --  Report as abuse
RET_SFC wrote:
With 42% of all expenditures financed by new borrowing, we could still live within the existing debt ceiling if all Federal government expenditures except debt service were cut 50%. That’s probably “Plan B.” What that would do to the US economy (indeed, to the world economy) is quite another matter, but it would “meet” obligations to both creditors and even the most rabid of Tea Party conservatives.

Jul 28, 2011 11:39am EDT  --  Report as abuse
WBBMD wrote:
Of course there will be “grave consequences”. Think of their bonuses that will probably be eliminated. No wait…they’re CEO’s…they get bonuses no matter what. Crap, there goes my theory on the meaning of “grave consequences”

Jul 28, 2011 11:59am EDT  --  Report as abuse
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