Wall Street lobbies over US debt crisis

 

New York

Senior executives, lobbyists and rank-and-file employees from across Wall Street have swung into action to try to persuade US politicians to pull back from the brink and permit the country to borrow the funds it requires to pay its bills.

The stand-off over raising the debt ceiling – which, if not resolved by tomorrow night, means the federal government will have to stop some payments and may default on its debt – has so alarmed the finance industry that one firm has ordered its staff to contact their Congressional representatives to demand compromise.

Allstate, an insurance firm, sent an email to its 45,000 staff at the end of last week, when markets began to lose confidence that a deal would be reached by the deadline.

The potential consequences of a default are difficult to predict, but could include major disruption in the payments system and the short-term credit markets and a sharp rise in interest rates which would harm the US economy. It would also trigger the loss of the country's triple-A credit rating, with unpredictable consequences for a financial system that uses US Treasuries as collateral in trillions of dollars of transactions and as the basis for pricing many other debt instruments.

Jamie Dimon, chief executive of JPMorgan Chase, held a telephone call with the Treasury Secretary, Tim Geithner, on Friday, in which they discussed contingency plans for keeping the payments system functioning correctly from Wednesday. Mr Dimon reiterated his insistence that a deal must be done. Banks' lobbyists, fearing that politicians have not fully grasped the consequences of a default or downgrade of US Treasuries, have been widely distributing research notes on the crisis to Congressional offices.

Wall Street had been wary of publicly arguing in favour of a debt ceiling increase, fearing that critics will characterise their warnings of a financial crisis as a cynical argument to get another "bailout" from the taxpayer.

News
Michael Buerk in the I'm A Celebrity jungle 2014
people
News
people

Arts and Entertainment
Avatar grossed $2.8bn at the box office after its release in 2009
filmJames Cameron is excited
Voices
File: David Cameron offers a toast during a State Dinner in his honour March 14, 2012
voicesAnd nobody from Ukip said babies born to migrants should be classed as migrants, says Nigel Farage
PROMOTED VIDEO
Arts and Entertainment
Convicted art fraudster John Myatt
art

News
Happy in his hat: Pharrell Williams
people
Life and Style
fashion

News
The Magna Carta
archaeologyContemporary account of historic signing discovered
News
Jeremy Paxman has admitted he is a 'one-nation Tory' and complained that Newsnight is made by idealistic '13-year-olds' who foolishly think they can 'change the world'.
peopleFormer Newsnight presenter is being touted for a brand new role
News
The two-year-old said she cut off her fringe because it was getting in her eyes
news

Video: It is the type of thing no parent wants to hear

News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Sales Executives

£19000 - £24000 per annum: Recruitment Genius: Due to our clients continuing s...

Argyll Scott International: Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Argyll Scott International: 2x Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Recruitment Genius: Senior Execution Trader

£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game