The dome of the Capitol is reflected in a puddle in Washington February 17, 2012.REUTERS/Kevin Lamarque

Another debt ceiling debacle could sink the economy

Last year's Congressional debt standoff hurt consumer confidence more than the collapse of Lehman Brothers, Betsey Johnson and Justin Wolfers write. This time could be worse.  Read more at Counterparties  

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Foreign central banks' U.S. debt holdings fall: Fed

NEW YORK | Thu Dec 29, 2011 4:31pm EST

NEW YORK (Reuters) - Foreign central banks' overall holdings of U.S. marketable securities at the Federal Reserve fell in the latest week, data from the U.S. central bank showed on Thursday.

The Fed said its holdings of U.S. securities kept for overseas central banks fell $22.84 billion in the week ended December 28, to stand at $3.411 trillion.

The breakdown of custody holdings showed overseas central banks' holdings of Treasury debt fell by $23 billion to stand at $2.679 trillion.

Foreign institutions' holdings of securities issued or guaranteed by the biggest U.S. mortgage financing agencies, including Fannie Mae <FNMA.OB > and Freddie Mac (FMCC.OB), rose by $172 million to stand at $731.8 billion.

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For balance sheet graphic: link.reuters.com/buf92k

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Overseas central banks, particularly those in Asia, have been huge buyers of U.S. debt in recent years and own more than a quarter of marketable Treasuries. China and Japan are the biggest two foreign holders of Treasuries.

The full Fed report can be found on: here

(Reporting By Steven C. Johnson; Editing by Padraic Cassidy)

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