The U.S. shouldn’t risk defaulting on its debt because doing so would wreak havoc in the world’s economy and financial markets, said the heads of JPMorgan, Deutsche Bank and Pacific Investment Management.
Bloomberg reports that JPMorgan Chief Executive Officer Jamie Dimon said on Saturday during a panel discussion at a financial industry conference in Washington: 'The United States cannot default and, in my opinion, will not default. It would ripple through the global economy in a way you couldn’t possibly understand'.
'When push comes to shove there will be an agreement', Pimco CEO Mohamed El-Erian told the same event. A default would 'trigger failures' in collateral markets and 'be a big blow to the economy', he said.
The warnings from the leaders of modern finance echoed those made by international economic policy makers also meeting in the U.S. capital and came as lawmakers said they lack a clear plan for preventing a default and ending the government shutdown. U.S. borrowing authority lapses on 17th October unless the nation’s $16.7trill debt ceiling is lifted.
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image: © Aaron Logan