Davos 2023: Goldman Sachs CEO concerned about debt ceiling

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David Solomon, Chief Executive Officer of Goldman Sachs, speaks during the Global Financial Leaders Investment Summit in Hong Kong
David Solomon, Chief Executive Officer of Goldman Sachs, speaks during the Global Financial Leaders Investment Summit in Hong Kong, China November 2, 2022. REUTERS/Tyrone Siu

DAVOS, Switzerland, Jan 19 (Reuters) - Goldman Sachs Group Inc.'s (GS.N) Chief Executive David Solomon expressed serious concern on Thursday that a political standoff over the U.S. debt ceiling could lead to a fiscal crisis.

"This is something that we should take very seriously, because the consequence of getting it wrong will be real," Solomon told Reuters in an interview.

"I'm concerned and I'm going to take any opportunity that I can, and we can as a firm, to engage with people in Washington to try to make sure they understand that we don't think that this is something that should be played with."

Solomon echoed other CEOs in Davos who expressed worries about the U.S. potentially defaulting on its debt because of a political stand-off between the Republican-controlled House of Representatives and President Joe Biden's Democrats.

"I don't want to test it, it won't be good. So let's not go there," he said.

Solomon spoke just as the U.S. government hit its $31.4 trillion borrowing limit on Thursday.

A stand-off in Washington over raising the debt ceiling has business leaders from Wall Street to Davos worried that this could be as disruptive as the protracted battle of 2011.

That stand-off prompted a downgrade of the U.S. credit rating and years of forced domestic and military spending cuts.

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Reporting by Lananh Nguyen; Editing by Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Lananh Nguyen is the U.S. finance editor at Reuters in New York, leading coverage of U.S. banks. She joined Reuters in 2022 after reporting on Wall Street at The New York Times. Lananh spent more than a decade at Bloomberg News in New York and London, where she wrote extensively about banking and financial markets, and she previously worked at Dow Jones Newswires/The Wall Street Journal. Lananh holds a B.A. in political science from Tufts University and an M.Sc. in finance and economic policy from the University of London.

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