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
07:08p SUNOCO LOGISTICS PARTNERS : drops remaining pipeline zoning workaround tries
07:08p SAM WOODE : South Jersey man, 76, sentenced in euthanizing dog, 14
07:07p CARMANAH TECHNOLOGIES : United States and Canadian Duties on Solar Modules Imported from The Peoples Republic of China and Taiwan
07:07pDJPETROLEO BRASILEIRO PETROBRAS : Brazil Supreme Court Clears Probe of Top Lawmakers Amid Petrobras Scandal
07:06p United States and Canadian Duties on Solar Modules Imported from The Peoples Republic of China and Taiwan
07:05p Montgomery Regional Airport Unveils Redesigned Baggage Claim Area
07:05p The Living Desert Zoo and Gardens Welcomes Litter of Warthogs
07:05p UK peer-to-peer lender Zopa expects to top 1 billion pounds in loans this year
07:04pDJGRAIN HIGHLIGHTS : Top Stories Of The Day
07:01p AURINIA PHARMACEUTICALS : Announces Change to Its Board of Directors
Latest news
Advertisement
Hot News 
BELLZONE MINING : Financing Update and Restoration of Trading
SNOOZEBOX : Confirms Ealing Council Project With Mears Group
CHURCHILL MINING : Board Change
THOMAS COOK : Cook and Fosun Strategic Partnership
MTY NV : ASML Receives Intel's Preferred Quality Supplier Award
Most Read News
06:05p HIGHWAY 50 GOLD : BRIEF: Eastbound Highway 50 at El Dorado Hills to close overnight Monday
06:06pDJINTUIT : Has Been Contacted by DOJ and FTC
06:02p CALAVO GROWERS : SECURITIES ALERT: Rosen Law Firm Reminds Calavo Growers Inc. Investors of Important March 23, 2015 Deadline in Class Action
06:29p CRACKER BARREL OLD COUNTRY STORE : LaVale Cracker Barrel plans moving forward
06:10p GEORGIA NCP : Vineville Avenue reopens to traffic
Most recommended articles
07:07pDJPETROLEO BRASILEIRO PETROBRAS : Brazil Supreme Court Clears Probe of Top Lawmakers Amid Petrobras Scandal
07:05p UK peer-to-peer lender Zopa expects to top 1 billion pounds in loans this year
07:04pDJGRAIN HIGHLIGHTS : Top Stories Of The Day
07:00pDJStocks Drop; Bond Yields, Dollar Soar on Jobs Report--Update
06:40p USD/JPY NFP Breakout at Risk for Japanese Verbal Intervention
Dynamic quotes  
ON
| OFF