Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Top U.S. bankers warn against prioritizing interest payments: WSJ

10/08/2013 | 04:59am US/Eastern

(Reuters) - Top U.S. bankers have warned the Obama administration and Republican lawmakers that any move to pay interest on debt before obligations such as Social Security and payments to veterans would pose severe risks to financial markets and the economy, the Wall Street Journal reported.

Some lawmakers think prioritizing interest payments would placate bond investors if the government breaches its borrowing limit, the Journal said.

However, heads of the nation's largest financial institutions told the officials in meetings that prioritizing some payments would create insurmountable uncertainty for investors, drive up borrowing costs and disrupt markets, the Journal said, citing people familiar with the meetings.

As the U.S. government moved into the second week of a shutdown on Monday with no end in sight, a deadlocked Congress also faced an October 17 deadline to increase the nation's borrowing power or risk defaulting on its debt.

If no deal is reached, many outside observers including debt-ratings firms assume the government will begin prioritizing payments to bondholders over others, rather than risk defaulting on its debt, the Journal said.

(Reporting by Sakthi Prasad in Bangalore; Editing by Supriya Kurane)

React to this article
Latest news
Date Title
<1m ago GENTING SINGAPORE : Share Buy Back - Daily Share Buy-Back Notice
<1m ago DEPARTMENT OF COMMERCE OF REPUBLIC OF INDIA : India and united states joint statement on the trade policy forum
<1m ago GENTING SINGAPORE : Company Announcement | 25 November 2014 Share Buy Back – Daily Share Buy-Back Notice
6m ago Triton Minerals Limited Environmental Studies Underway at Nicanda Hill
8m ago TRITON MINERALS : ASX:TON) Environmental Studies Underway at Nicanda Hill
8m ago AT&T : Announces More Than 275 New Jobs Filled In Alabama In 2014
9m ago AT&T : Announces More Than 1,300 New Jobs Filled In Georgia In 2014
9m ago MASTERCARD : NIMC Card Bureau Gets GVCP Certification
9m ago FASTENAL : Roll-Kraft Adds Fastenal Vending Machines to Reduce Waste and Increase Efficiency
10m ago TABLEAU SOFTWARE : Announces Strong Growth in EMEA Region, Tops 5,000 Customer Accounts
Latest news
Advertisement
Hot News 
PARAGON OF : Idem Capital reports 89% increase in investment activity in 2014
UNITED TECHNOLOGIES : Appoints Gregory Hayes To Succeed Louis Chenevert As CEO
E ON SE : .ON unvils final layout for 400 MW Rampion Offshor Wind Farm in UK
AMERICAN TOWER : to buy over 4,800 Bharti Airtel phone masts in Nigeria
CERNER : Big Data to Big Value
Most Read News
1d agoDJCEOS' TEST : Contending With Activist Investors -2-
1d ago FLOWSERVE : McCANNA Introduces In-Line Maintainable Cryogenic Valve
1d ago DP WORLD : Belgian operations disrupted
1d ago CUBIC : To Present At Credit Suisse Global Industrials Conference
1d agoDJCHINA LNG : Signed Preliminary Liquefied-Natural-Gas Agreement With Sinopec Unit
Most recommended articles
1d ago Discover Financial sues Visa over anti-competitive card practices
1d agoDJIs India now fully valued? -- Barron's Asia
1d agoDJBOJ Shirai Says Extra Action Was Justified
1d ago Crude Near Key Support As OPEC Meeting US Inventories Data Looms
1d ago Canada 'concerned' as Buy America rules applied to B.C. ferry build
Dynamic quotes  
ON
| OFF