As talks over raising the U.S. government’s $31.4 trillion debt ceiling go down to the wire, Wall Street banks and asset managers have been preparing for the fallout from a potential default.
The financial industry has prepared for such a crisis before, most recently in September 2021. But this time, the relatively short time frame for reaching a compromise has bankers on edge, said one senior industry official.
Less than two weeks remain until June 1, when the Treasury Department has warned that the federal government might not be able to pay all its debts, a deadline U.S. Treasury Secretary Janet Yellen reaffirmed on Sunday. Citigroup (C.N) CEO Jane Fraser said this debate on the debt ceiling is “more worrying” than previous ones. JPMorgan Chase & CO (JPM.N) CEO Jamie Dimon said the bank is convening weekly meetings on the implications.
