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.Reuse content