WASHINGTON | Di 26 april 2011 10: 53 am EDT
WASHINGTON (Reuters)-the United States could lead to "another catastrophic financial crisis" if Congress fails to reduce the debt, the President of the Treasury borrowing Advisory Committee said.
"Any delay in making an interest payment by Treasury even for a very short period of time would the u.s. Treasury and the overall financial markets in unfamiliar terrain and might lead to another devastating financial crisis, "said Matthew Zames, managing director of JP Morgan and TBAC President in a letter to the U.s. Treasury Secretary Timothy Geithner.
The letter of 25 April came as Congress is under pressure to the current 14.24 trillion debt limit to continue to finance the Government.
However, are Republicans for deeper budget cuts in exchange for the increase in the ceiling of the debt pressing.
Zames a standard by the u.s. Treasury, warned "or even an extended delay in raising the debt ceiling could lead to a downgrade of the U.S. sovereign rating."
That could increase of Treasury borrowing costs by a full percentage point for each one-notch downgrade, "he said.
(Reporting by Doug Palmer; Edit by James Dalgleish)
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